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MetroPCS shares up as T-Mobile deal is criticized

Published on NewsOK Modified: March 28, 2013 at 12:38 pm •  Published: March 28, 2013

NEW YORK (AP) — Investors bet Thursday that T-Mobile USA will have to sweeten its proposal to merge with smaller cellphone carrier MetroPCS Communications Inc. after an influential shareholder advisory firm came out against the deal.

Shares of Dallas-based MetroPCS, the country's fifth-largest cellphone company, rose 42 cents, or 4 percent, to $10.95 in midday trading. It was the highest level for the stock since November, a month after the deal was announced.

Under the deal, T-Mobile USA's parent company, Deutsche Telekom AG of Germany, will hold a 74 percent stake in the combined company, while MetroPCS shareholders will own the remainder and receive a special dividend of $1.5 billion.

Institutional Shareholder Services recommended on Wednesday that shareholders vote against the deal when they meet on April 12, saying their share of the combined company is unfairly small, and MetroPCS would do fine as a standalone company.

Some large MetroPCS shareholders have opposed the deal for months. Analyst Kevin Smithen at Macquarie Capital said Thursday that the "no" recommendation from ISS clinches it.

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