Deutsche Telekom AG (FRA:DTE) (PINK:DTEGY) (ETR:DTE) was said to be considering an improved deal for the proposed merger between its T-Mobile USA subsidiary and MetroPCS Communications Inc (NYSE:PCS).
The report was posted by Reuters; however, the telecom giant then issued a statement saying that it actually wasn’t considering a sweeter deal. Instead, it said it was standing by the original deal.
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Although regulators have approved the deal between T-Mobile USA and MetroPCS Communications Inc (NYSE:PCS), shareholders of MetroPCS have said they would vote against it because Deutsche Telekom AG (FRA:DTE) (PINK:DTEGY) (ETR:DTE) would get all the benefits from it. The vote is coming up on April 12.
Reuters cited “two people familiar with Deutsche Telekom’s thinking” when it reported the supposedly sweetened deal. It also cited “a third person who is familiar with MetroPCS’s thinking,” who said they have a week to decide if they will take it.
According to Reuters, Deutsche Telekom AG (FRA:DTE) (PINK:DTEGY) (ETR:DTE) first said it would “flatly deny” that it was working on a better deal for MetroPCS shareholders. However, the company’s response changed slightly to, “no comment as to possible changes to the terms of its agreement with MetroPCS and that it continues to believe its current proposal was in the best interests of shareholders.”
That current proposal would give MetroPCS shareholders $4.06 per share plus a 26 percent stake in the new company formed by the merger. The rest of the shares would be owned by Deutsche Telekom AG (FRA:DTE) (PINK:DTEGY) (ETR:DTE). The new company would start out with net debt of almost $19 billion, with $15 billion of that debt being in a loan from Deutsche Telekom.
At the time of this writing, shares of MetroPCS Communications Inc (NYSE:PCS) were up 1.73 percent.