MetroPCS Receives DOJ Second Request For T-Mobile Deal

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On Monday, MetroPCS Communications Inc (NYSE:PCS) announced in a press release that the Department of Justice (DOJ) has requested additional information (“Second Request”) for its possible transaction with T-Mobile USA.

MetroPCS Receives DOJ Second Request For T-Mobile Deal

This is required before the consolidation can be approved. MetroPCS Communications Inc (NYSE:PCS)  plans to fully cooperate to “obtain the approval of the transaction as soon as possible” according to the press release, and added that it “remains confident that the DOJ will find that the transaction is both pro-competitive and pro-consumer.”

The request comes after the initial announcement of a proposed merger back on October 3.

In a joint statement by the two, the companies announced plans to combine their efforts and introduce a high-speed 4G LTE network.  T-Mobile had hopes the deal would give the combined company “expanded scale, spectrum, and financial resources to aggressively compete with the other national U.S. wireless carriers”.

Financial Times Deutschland reported that Deutsche Telekom AG (ADR) (PINK:DTEGY) would have a 74 share ownership, with MetroPCS having a 26 percent stake in the company, while receiving $1.5 billion, reported Engadget. The companies planned to keep their customers separate.

At the time, additional details included John Legere, T-Mobile’s president and chief executive, would keep his role in new company, while MetroPCS Communications Inc (NYSE:PCS) chief financial officer and vice chairman J. Braxton Carter would be the chief financial officer.

The deal is expected to close in 2013’s first half, pending MetroPCS shareholders and regulators’ approvals.

Meanwhile, in a Securities and Exchange Commission filing on Nov. 16, MetroPCS disclosed that it checked out numerous partners before deciding to marry T-Mobile.

While not disclosing names, the filing showed it considered a strategic partnership or takeover with a minimum of nine companies.

According to CNN, since 2009, MetroPCS held negotiations with Dish Network (NASDAQ:DISH), as well as two companies it has since purchased, DBSD and Terrestar, Leap Wireless International, Inc. (NASDAQ:LEAP), U.S. Cellular (NYSE:USM), AT&T Inc. (NYSE:T), Sprint Nextel Corporation (NYSE:S), and Verizon Communications Inc. (NYSE:VZ), all before agreeing to the T-Mobile merger.

The filing also suggested that any suitor it rejected could return and it also hinted Dish and Sprint Nextel Corporation (NYSE:S) could be back with counter-offers. In 2010, Dish bid $11 per share for MetroPCS, which was greater than T-Mobile’s; it was also a little higher than MetroPCS’s current share price. The negotiations eventually stonewalled and then fell apart.

Recently, Sprint Nextel Corporation (NYSE:S) agreed to sell 70 percent of the company to Japan’s SoftBank (TYO:9984).

But don’t count this as a done deal yet. Brett Feldman, a Deutsche Bank telecom analyst, said to CNN, “The door remains open for MetroPCS Communications Inc (NYSE:PCS) to receive a superior bid.”

On Monday, MetroPCS Communications Inc (NYSE:PCS)’s shares slightly rose, but on Tuesday, the stock is down 2.27 percent to $10.74.

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