UPDATE - Deutsche Telekom Cuts Debt Load

By Marc Castro

Apr 11, 2013 08:44 AM EDT

In a bid to woo investors to vote for the merger, Deutsche Telekom had reduced the level of the merged company's debt for the proposed T-Mobile USA and MetroPCS merger. This is a clear indication that the European telecommunications giant is bowing to pressure from proxy advisory firms and activist shareholders.

With the announcement, shares of MetroPCS rose by 2% in late trading. The new terms would also increase the chances for ther deal to push through. This would grant the fourth largest US mobile provider a spectrum to build a network to handle the data requirements that both consumers and businesses in the US now demand from their smartphones.

The reduction would be from the current US $15 billion to a new level of US $11.2 billion, exclusing the interest rate changes. This improves the valuation of the merger by US $2.67 value added to each share of MetroPCS stock. Another deal sweetener is the extended lock-out period. This is the prohibition on the public selling of shares in the company from twelve months in the inital deal to eighteen months after the finalization of the merger deal.

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