By Nathalie Tadena
MetroPCS Communications Inc. (PCS) said proxy-advisory firm
Institutional Shareholder Services has recommended shareholders
vote in favor of a merger with T-Mobile USA, reversing its prior
opinion, after terms of the deal were sweetened.
The revised recommendation comes a day after fellow proxy firm
Glass Lewis & Co. also shifted course and recommended MetroPCS
shareholders vote in favor of the proposed merger.
"We are pleased that both ISS and Glass Lewis recognize the
enhanced stockholder value and compelling benefits created by the
amended terms of the proposed combination of MetroPCS and
T-Mobile," MetroPCS Chairman and Chief Executive Roger D. Linquist
said Wedensday.
T-Mobile owner Deutsche Telekom AG (DTEGY, DTE.XE) sweetened its
bid for MetroPCS after unhappy shareholders appeared poised to vote
the deal down. Opponents of the deal were supported by Glass Lewis
and ISS, which had called the terms unfair.
Deutsche Telekom improved the terms by reducing the amount of
debt to be loaded on the combined company and reducing the interest
rate on that debt.
In its revised recommendation Wednesday, ISS said the improved
terms of the deal agreement "have enhanced the economic value PCS
shareholders will receive in this merger."
"Given the reduced debt load that will be carried by the new
company and the resulting appropriate equity split granted to PCS
shareholders, and the increased commitment to the combined company
exhibited by DT's extension of the lockup period, support for the
merger is warranted," ISS said.
A shareholder vote on the merger has been rescheduled for April
24.
Shareholders P. Schoenfeld Asset Management LP and Paulson &
Co. have also dropped their opposition to the deal in light of the
new terms.
Shares closed at $11.02 and were unchanged after hours. The
stock is up 17% over the past three months.
Write to Nathalie Tadena at nathalie.tadena@dowjones.com
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