Paulson & Co. Will Vote Against the MetroPCS Merger as Currently Structured
NEW YORK, Feb. 28, 2013
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
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
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 distressedinvesting. Paulson has approximately
US$18 billion in assets under management and has offices in New York, London
and Hong Kong.
SOURCE Paulson & Co. Inc.
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