T-Mobile’s parent company, Deutsche Telekom, was poised to merge with MetroPCS for a purchase price of $1.5 billion, until the shareholders stepped in. MetroPCS, who has been successful with their low-cost LTE service, is currently sitting at around $11.33 per share. Deutsch Telekom’s original offer of $1.5 billion would hand over 74% of the stock, which works out to around $12.48 per share, as well as include a 1-for-2 reverse stock split. The remaining 26% would stay in the shareholders hands.
The current shareholders are feeling a bit undervalued, which you can’t completely blame them since the company was once valued at $10 billion. They feel that the small asking price is a far cry from the $39 billion AT&T dropped for T-mobile itself, and T-Mo doesn’t even offer LTE service. This barricade by stockholders could potentially affect not only the mobile service business, but also increase the value of the MetroPCS stock on the New York Stock Exchange.