This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Paulson & Co. Responds To Comments Made By T-Mobile CEO John Legere

NEW YORK, March 27, 2013 /PRNewswire/ -- Paulson & Co. Inc. ("Paulson"), the largest MetroPCS shareholder, owning 36.3 million shares or 9.9% of the shares outstanding as of the record date, strenuously objects to T-Mobile CEO John Legere's characterization of MetroPCS shareholders as greedy because they believe the current terms of the merger are poor for MetroPCS shareholders. 

Paulson reminds MetroPCS shareholders that John Legere owns no MetroPCS stock, wants the best deal for T-Mobile/Deutsche Telekom, not MetroPCS, and is the wrong person to comment on the interests of MetroPCS shareholders.

If anyone is being greedy here, it is Deutsche Telekom by stripping out $15 billion of senior debt at above market rates and terms for themselves before the proforma shareholders get anything.  MetroPCS shareholders are left with a subordinated minority stake in an over leveraged equity stub.  When the $15 billion debt Deutsche Telekom strips out is added to Deutsche Telekom's 74% equity in the new company, Deutsche Telekom gets 85% of the total consideration even though they contribute only 77% of the combined 2012 EBITDA.  If MetroPCS were to receive proportional value for their 2012 EBITDA contribution, MetroPCS should receive an incremental $5.58 per share above the current terms.  While we support industry consolidation, the current proposal is a bad deal for MetroPCS shareholders.  We believe MetroPCS is worth more as a standalone company rather than with T-Mobile under these unfavorable terms.

We have participated in thousands of merger transactions and have cast our support in favor of 99% of them.  This is the only one in the recent past that we are voting against.  It is not surprising that Deutsche Telekom is so eager to close this deal as they get the lion's share of the benefits.  As a shareholder of a public company, we have the right to vote against a transaction that we think severely undervalues our stake.  If Deutsche Telekom wants to get MetroPCS shareholder support, we suggest Deutsche Telekom significantly reduce the debt they are taking back and/or dramatically increase MetroPCS's proforma share of the combined company.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs