MetroPCS Again Argues for T-Mobile Merger

MetroPCS Communications Inc. (PCS) again argued its merger with Deutsche Telekom AG's (DTEGY, DTE.XE) T-Mobile USA is a more-attractive option for shareholders than remaining a stand-alone company.

Last week, U.S. regulators approved the combination of wireless carriers MetroPCS and T-Mobile USA, leaving MetroPCS shareholders as the last major obstacle. The merger would create a publicly traded company of which Deutsche Telekom would own 74%. Shareholders of pay-as-you-go carrier MetroPCS will vote whether to approve it April 12.

Hedge funds Paulson & Co. and P. Schoenfeld Asset Management LP have argued the new company would have too much debt, preventing it from effectively competing with peers, and the interest being charged by T-Mobile parent Deutsche Telekom is unreasonable. The two shareholders have also argued for better terms, an alternate bidder or remaining independent.

MetroPCS, in an investor presentation filed Monday with the U.S. Securities and Exchange Commission, said Deutsche Telekom's debt terms are market-based and represent a favorable deal for the combined company.

The company also said the combined company's leverage will be appropriate and in-line with peers.

MetroPCS also said opting for unsecured debt provides the combined company with significantly greater flexibility than secured debt, which would contain more restrictive financial covenants.

The company reported last month its fourth-quarter earnings plunged 65% as higher expenses outweighed a rise in revenue, while it reported a net subscriber loss.

Shares closed Friday at $10.38 and were inactive premarket. The stock is up 4.4% this year.

Write to Melodie Warner at melodie.warner@dowjones.com

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