MetroPCS Chief Says Stock Undervalued, Sees More Mergers

MetroPCS Communications Inc. (PCS) Chief Executive Officer Roger Linquist said the company’s stock is undervalued as investors focus too much on its pending merger with Deutsche Telekom AG (DTE)’s T-Mobile USA unit.

MetroPCS stock, which has declined 26 percent since the T- Mobile deal was announced, is “absolutely” not trading at its fair value, said Linquist, speaking to investors at the UBS Global Media and Communications Conference in New York today.

The Richardson, Texas-based company had been the center of deal discussions with at least eight players before T-Mobile’s agreement to give shareholders $1.5 billion and hold 74 percent of the merged business. One of the previous offers was valued at $13.39 a share, according to the company’s proxy filing. That offer came from Sprint Nextel Corp. (S), according to people familiar with the matter. Linquist didn’t comment on whether Sprint was working on a counterbid, though he said sooner or later the companies would probably come together.

“Consolidation has to happen at some point,” Linquist said in an interview after his presentation. “We are focused on the deal 100 percent,” said Linquist of the T-Mobile agreement. Looking beyond that, he saw more deals in the industry.

Industry consolidation “may take five years -- it may take longer,” Linquist said.

MetroPCS Chief Financial Officer Braxton Carter, who was also at the UBS presentation, declined to give any financial projections. He said the company planned to give guidance tomorrow during Deutsche Telekom’s analyst day summit in Bonn.

MetroPCS shares rose 1.4 percent to $10.10 at the close in New York.

To contact the reporters on this story: Scott Moritz in New York at smoritz6@bloomberg.net; Serena Saitto in New York at ssaitto@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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