--MetroPCS shareholders approve merger with T-Mobile
--Deal expected to close April 30
--MetroPCS first-quarter profit down 7.7%
(Updates with earnings details, after hours share price)
By Nathalie Tadena
MetroPCS Communications Inc. (PCS) shareholders approved the
company's merger with Deutsche Telekom AG's (DTE.XE, DTEGY)
T-Mobile USA unit after terms of the deal were improved, and the
wireless-service provider reported its first-quarter earnings
slipped 7.7% as it recorded a larger income tax provision and
relatively flat revenue.
"We are pleased with the outcome of today's vote," MetroPCS
Chief Executive Roger D. Linquist said. "Our combination with
T-Mobile will create the value leader in the U.S. wireless
marketplace, and we are confident that the combination of these two
outstanding businesses is the best outcome for MetroPCS and our
stockholders."
The company said about 80% of its total shares outstanding voted
in favor of the plan to issue MetroPCS shares to Deutsche Telekom
in connection with the deal.
The deal is expected to close April 30, and it has already
received regulatory approval.
T-Mobile agreed last year to merge with MetroPCS, which would
create a publicly traded company of which Deutsche Telekom would
own 74%. Under the deal, MetroPCS shareholders would receive about
$4.06 a share in cash and the remaining 26% in the newly merged
company.
Earlier this month, Deutsche Telekom sweetened its bid, after
MetroPCS faced opposition from shareholders unhappy with the deal's
debt component in particular.
Under the amended terms, MetroPCS will reduce the combined
company debt issued to Deutsche Telekom by $3.8 billion to $11.2
billion, a move the carrier said creates additional financial
flexibility and significantly increases the combined company's
equity value. Deutsche Telekom also agreed to lower the interest
rate on the T-Mobile debt by half a percentage point.
MetroPCS shareholders P. Schoenfeld Asset Management LP and
Paulson & Co. as well as proxy-advisory firms Institutional
Shareholder Services and Glass Lewis & Co. dropped their
opposition to the deal in light of the new terms.
Late Wednesday, MetroPCS reported a first-quarter profit of
$19.4 million, or five cents a share, down from a year-earlier
profit of $21 million, or six cents a share. Analysts polled by
Thomson Reuters had expected a per-share profit of nine cents.
Revenue edged up 0.8% to $1.29 billion, matching analyst
estimates. The company's income tax provision increased 64% from a
year earlier.
MetroPCS had about 9 million subscribers at the quarter's end,
down 5.1% from a year earlier. The company had 3.5 million
subscribers on its 4G LTE network, an increase of 1.2 million
subscribers from the prior quarter.
MetroPCS's churn, another measure of customer turnover, fell to
2.9% from 3.1% a year earlier and 3.6% in the fourth quarter.
Average revenue per user edged up 1% to $40.96.
MetroPCS shares slipped 1.4% to $11.60 after hours. The stock is
21% higher over the past three months, through the close.
--Saabira Chaudhuri contributed to this article.
Write to Nathalie Tadena at nathalie.tadena@dowjones.com
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