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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.