Hedge Funds Win Better Deal In MetroPCS-T-Mobile Merger

Apr 12 2013 | 10:39am ET

Weeks after blasting Paulson & Co. and P. Shoenfeld Asset Management as "greedy hedge funds," T-Mobile is sweetening the pot for the two.

T-Mobile owner Deutsche Telekom's new offer to acquire MetroPCS Communications includes $3.8 billion less debt, and an agreement to hold the company for three times as long as originally planned.

While Paulson said it still needed to review the new proxy statement and P. Shoenfeld said "the revised transaction terms do not reflect all the improvements we were seeking," both hedge funds said they would likely back the new deal. Current MetroPCS shareholders will own 26% of the combined T-Mobile-MetroPCS.

Deutsche Telekom said it would remain an investor in the company for at least 18 months, and cut the interest rate on the lower debt by about a half percentage point.

Last month, T-Mobile CEO John Legere vowed that the merger would go forward, "despite the several greedy hedge funds that are trying to take a double dip out of that process." But the opposition of Paulson and P. Shoenfeld, who own a combined 12% of MetroPCS, appears to have worked: The New York Times reports that, had the vote on the original proxies gone forward today, success for T-Mobile was "mathematically impossible."

"We feel our central goal of making the combined PCS/T-Mobile company more competitive and valuable for all shareholders, including Deutsche Telekom, resulting in obtaining superior value for PCS shareholders and believe that these revised terms are the best available alternative for PCS shareholders at this time."


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

The healthcare sector went on a tear beginning in 2011, thanks in large part to the passage of the Affordable Care Act and its impending implementat