T-Mobile USA’s merger with MetroPCS Communications Inc (NYSE:PCS) may have gotten the green light from all the necessary regulatory agencies, but tension continues to increase as MetroPCS shareholders push harder and harder against it.
John Paulson said earlier this month that his firm Paulson & Co. will vote against the merger. On Wednesday, he had something to say about T-Mobile’s CEO John Legere’s comments that the merger would be approved in spite of “greedy hedge funds that are trying to take a double dip out of that process.”
According to Dow Jones Newswires, Paulson’s hedge fund said Wednesday that it objects to Legere’s inference that MetroPCS Communications Inc (NYSE:PCS) shareholders are greedy because they don’t believe the terms of the merger are good enough for them. The hedge fund also said once again that it would vote against the merger of MetroPCS Communications Inc and T-Mobile USA, a subsidiary of Deutsche Telekom AG (FRA:DTE) (PINK:DTEGY) (ETR:DTE).
Meanwhile a proxy advisory firm is also offering free advice to MetroPCS shareholders. DealBook reports that Institutional Shareholder Services (I.S.S.) agreed with MetroPCS shareholders that the new company formed by the merger would start out with too much debt and that the amount of the company they would own under the terms isn’t a fair amount.
Pauslon has said that Deutsche Telekom AG (FRA:DTE) (PINK:DTEGY) (ETR:DTE) would get most of the benefits from the merger under the current terms. The fact that I.S.S. is in agreement with the shareholders who disagree with the terms of the merger could sway the other shareholders to vote against it as well.
Many institutional investors base their votes on recommendations made by I.S.S.; although, others ignore the advisory firm.