A group of MetroPCS Communications Inc. investors asked a federal court to delay a planned April 12 shareholder vote on the wireless carrier’s proposed $39 billion merger with T-Mobile USA Inc.
Plaintiffs including the Merger Fund and GS Master Trust, which said they own more than 12.5 million MetroPCS shares, allege that the company issued a false and misleading proxy statement in October seeking shareholder support for the deal. They want next month’s meeting postponed until the proxy statement can be amended.
T-Mobile and its owner, Deutsche Telekom AG, will “gain enormous benefits and strategic advantage from the proposed transaction,” according to the complaint filed today in federal court in Manhattan. The merger would create a publicly traded company 74 percent-owned by Bonn-based Deutsche Telekom and carrying $23.2 billion in debt, including capital leases.
“The proposed transaction represents a windfall to Deutsche Telekom at the expense of the MetroPCS shareholders,” according to the complaint.
Defendants named in the complaint include Chief Executive Officer Roger Linquist and directors Arthur Patterson and W. Michael Barnes. The suit includes claims of breach of fiduciary duty and violation of securities law.
“These defendants acting recklessly, in bad faith and in conscious or reckless disregard of their duties, caused MetroPCS to issue a materially false and misleading March 2013 statement,” the shareholders alleged.
MetroPCS intends to defend itself against the lawsuit, the company said in an e-mailed statement.
Advisory firm Institutional Shareholder Services Inc. has urged shareholders to block the merger, citing unfavorable terms and the potential for MetroPCS to thrive as an independent company.
The case is The Merger Fund v. MetroPCS Communications Inc. 13-cv-02066, U.S. District Court, Southern District of New York (Manhattan).