NEW YORK (TheStreet) -- MetroPCS (PCS) shareholders have approved the wireless carrier's merger with T-Mobile USA, a unit of German telecom conglomerate Deutsche Telekom, in a deal both companies hope will revive their competition with AT&T (T) and Verizon (VZ).
Shareholder approval for the merger also comes after Deutsche Telekom was sharply criticized by hedge fund investors such as Paulson & Co. for piling on too much high cost debt on the combined T-Mobile and MetroPCS.
Earlier in April, T-Mobile amended its offer for MetroPCS, in a change of the terms to the merger that reduced overall loans by $3.8 billion and cut the interest rate on the remaining $11.2 billion in financing by 50 basis points.
Vocal critics of T-Mobile's initial offer such as Paulson & Co., run by hedge fund billionaire John Paulson, and P. Schoenfeld Asset Management took the amended terms as reason to support the proposed merger, paving the way for Wednesday's shareholder approval.
T-Mobile's initial proposal paid MetroPCS shareholders $4.08 in cash and half of a share of the combined company. MetroPCS valued the total deal at between $16.50 and $18.80 a share in a recent proxy filing. Under the terms of the initial deal, Deutsche Telekom will take a 74% stake in the combined T-Mobile and MetroPCS. The merger comes at a crucial time for T-Mobile amid the company's newly unveiled effort to sell unlimited Apple (AAPL) iPhone 5 plans at a discount to top wireless carriers AT&T and Verizon. T-Mobile is also offering a no-contract iPhone, meaning consumers will not be asked to sign fee-laden two-year contracts to receive subsidized iPhones. In the wake of Paulson & Co.'s support of amended terms to T-Mobile's offer for MetroPCS, another twist to the wireless industry emerged.
On April 15, satellite TV provider Dish Network (DISH) unveiled a $25.5 billion offer for Sprint (S), in a proposal to trump a previously agreed merger agreement between the nation's third leading wireless carrier and Japanese telecom SoftBank. Dish's move comes amid a frenzied 18-months in telecom consolidation, where the likes of Sprint and T-Mobile have sought ways to shore up their finances, increase wireless service and grow customer bases to revive competition with AT&T and Verizon, who've consistently gained market share in a consumer switch to data intensive smartphone devices.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV