The largest shareholder in MetroPCS Communications Inc. (PCS),
hedge fund Paulson & Co., intends to support a revised takeover
offer from Deutsche Telekom AG (DTE.XE DTEGY), reversing opposition
to the previous structure of the deal.
The fund, which owns about 9.9% of MetroPCS shares, had argued
the previous deal's structure was unfair to shareholders and had
intended to vote against the deal. Late Wednesday, Deutsche Telekom
sweetened its offer prior to a planned Friday vote that was largely
expected to fail. MetroPCS has scheduled a vote on the revised
terms for April 24.
The revised terms lower the amount of debt transferred to the
new company by $3.8 billion and cut the interest rate on that debt
by half a percentage point. Paulson & Co. had previously made
clear it would support a deal that improved on those terms.
On Thursday, the firm said the restructured offer is a
"substantial improvement" and thanked Deutsche Telekom for making
the changes.
"While Paulson needs to review the revised proxy statement
before making a final decision, Paulson intends to vote for the
merger as restructured," it said in a statement.
Under the deal, the German telecom company's U.S. unit, T-Mobile
USA, would merge into the already public structure of MetroPCS,
with Deutsche Telekom getting 74% of the company. MetroPCS
shareholders will get the rest, along with $1.5 billion in cash, or
about $4.09 a share.
Paulson had joined another hedge fund, P. Schoenfeld Asset
Management, in opposing the deal. P. Schoenfeld Asset Management
had filed a proxy to solicit other investors to join its position
and said late Wednesday it was reviewing the new offer.
Write to Thomas Gryta at thomas.gryta@dowjones.com
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