NEW YORK, Feb. 28, 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, intends to vote against the MetroPCS/T-Mobile transaction. While we believe in the strategic merits of the proposed combination, Paulson believes the proforma company has too much debt at too high an interest rate to be competitive in the well-capitalized U.S. wireless industry. The highly levered pro forma equity creates disproportionate risk for MetroPCS shareholders, while the majority of the value is extracted by Deutsche Telekom through the $15 billion of intercompany debt ("DT Notes").Given this significant equity handicap, we believe MetroPCS is worth more as a stand-alone company as it will be free to pursue its successful stand-alone strategy while examining opportunities for higher value strategic transactions.
We would however support a restructured deal with reduced amounts of intercompany debt, a lower interest rate on that debt, added cash and a higher exchange ratio for MetroPCS shareholders, or some combination of the above.
For a full copy of the letter sent to the Boards of Directors, please click here.
For further information, please contact:
Armel Leslie, Walek & Associates, +1-212 590-0530
Paulson & Co. is an investment management firm that specializes in merger arbitrage, event-driven and distressed investing. Paulson has approximately US$18 billion in assets under management and has offices in New York, London and Hong Kong.
SOURCE Paulson & Co. Inc.