The merger between MetroPCS Communications Inc. and Deutsche Telekom AG's T-Mobile is facing more challenges as opposition gains momentum following the recommendation of two of three shareholder advisory firms to block the deal.
Major MetroPCS shareholder P. Schoenfeld Asset Management LP is set to initiate a webcast on April 4 to explain its stance in the wireless carrier to other company shareholders. Other shareholders suggesting to terminate the merger last week are Institutional Shareholder Services and Glass, Lewis & Co..
The opposition to the merger is aiming to force Deutsche Telekom to offer deal terms better than what it is currently offering.
The proposed acquisition has been criticized because it is expected to form a new company loaded with too much debt. Many have also suggested that MetroPCS could have more potential to achieve growth if it stays as a sole operating business.
Analyst Jonathan Chaplin at New Street Research in New York said in a statement that the German phone carrier has to sweeten as he expects it to fail pursuing its current offer.
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