Deutsche Telekom Ups the Terms to MetroPCS to Merge withT-Mobile

Posted by at 9:34 am on April 11, 2013

Deutsche Telekom has updated its proposal to merge T-Mobile USA and MetroPCS with more favorable financial terms, in an effort to get shareholders to vote for the deal. The changes to the proposal, which has been deemed its “best and final offer,” has forced MetroPCS to delay the final shareholder vote until April 24th.

The new proposal sees Deutsche Telekom reducing the debt owed by the merged company by $3.8 billion to $11.2 billion, and to lower the interest rate on the loan by half a percent, writes Bloomberg. The lock-up period, a time when Deutsche Telekom cannot publicly sell shares from the new entity, has been extended from six months to 18 months. Other details, such as MetroPCS owning only 26 percent of the new company, remain static.

The changes could help win over critics of the deal, including Institutional Shareholder Services Inc. and Glass, Lewis & Co., that advised other shareholders to vote against the merger. Some critics have already welcomed the move by Deutsche Telekom, and will be reviewing the new terms ahead of the rescheduled vote.

The proposed merger of the two carriers has already received scrutiny from the FCC and the Department of Justice, passing both with no negative commentary. The shareholder vote remains the last  barrier to the merger.

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