ISS, one of the proxy advisory firms for MetroPCS Communications Inc shareholders, has advised its clients that they should vote in favor of the new merger plans for MetroPCS and T-Mobile USA. The turnabout came after it had reviewed the 'deal sweeteners' made by T-Mobile parent Deutsche Telekom AG.
The offer for the merger was improved through the reduction of the proposed debt load of the new merged company after criticism from advisory firms Glass Lewis and ISS.
ISS is the largest US proxy advisor firm and it had previously recommended the rejection of the original merger proposal. Now, with the smaller debt load and other included changes, the deal becomes much more attractive for shareholders.
The offer needs to obtain shareholder approval in the MetroPCS meeting on April 24. If approved, the MetroPCS shareholders would receive US$4.06 per share and stock value equals to 26% of the combined firm. The remaining 74% would then be owned by Deutsche Telekom AG.
The new debt load for the merged firm would be trimmed by US$3.8 billion and cut interest rates on the debt by 50 basis points.
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