NEW YORK, March 12 MetroPCS Communications Inc
defended its proposed merger with T-Mobile USA in a
letter to shareholders on Tuesday amid a proxy battle ahead of
its April 12 shareholder meeting.
Two big shareholders have criticized the deal MetroPCS and
the Deutsche Telekom unit announced in October due to
its valuation of MetroPCS and the proposed $21 billion debt
level of the combined company.
P. Schoenfeld Asset Management, which had a 1.66 percent
stake in MetroPCS on Dec. 31, is leading a proxy battle against
the merger. It has gained support from the company's top
shareholder, Paulson & Co, which owns 9.9 percent of MetroPCS
Btu MetroPCS said in its letter that the combined company's
debt leverage would be in line with those of its peers and its
own historical average.
Under the deal, Deutsche Telekom would end up with a 74
percent stake in the combined company, and MetroPCS would
declare a 1-for-2 reverse stock split and pay $1.5 billion in
cash to its shareholders.
Along with their concerns about the company's debt level,
Schoenfeld and Paulson have also said the 26 percent ownership
being offered to MetroPCS shareholders was not enough and that
MetroPCS would be worth more as a stand-alone company.
But MetroPCS said the deal offered shareholders a 70 percent
to 90 percent premium, including the net present value of
projected cost savings from the merger.
The company also said the stock would be worth 19 percent
less than the current price without the proposed $1.5 billion
cash payment to shareholders.
MetroPCS shares were down 1.8 percent at $10.31 in morning