Executives See Positive Progress on T-Mobile/MetroPCS Merger
Progress toward combining T-Mobile USA and MetroPCS remains very positive, executives from both carriers said Tuesday during a presentation at a Citigroup investor conference. T-Mobile CEO John Legere said he believes the entire process is progressing ahead of schedule and that he’s “anxious that we will become the new company relatively soon."
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The process is going so well that a potential deal closing as soon as April 1 is “very probable,” said MetroPCS Chief Financial Officer Braxton Carter. The FCC review process has gone particularly well, he said. Comments on the proposed combination have been “very light” to the commission “considering the magnitude of what we were doing,” Carter said. The perceived ease of the merger’s approval process has occurred because the deal is “highly pro-competition,” he said. Should the process continue as anticipated, MetroPCS shareholders may vote on the deal in late February or early March, he said. Under the transaction announced in October, MetroPCS shareholders would receive $1.5 billion in cash and would retain 26 percent ownership of the combined carrier (CD Oct 4 p1). Germany-based Deutsche Telekom, owner of T-Mobile, would own the rest. U.S. citizens hold 90.6 percent of the stock in MetroPCS, Carl Northrop, counsel for MetroPCS, said Monday in an FCC filing (http://xrl.us/bn9xuy).
The two carriers have engaged in “very deep, detailed work” on transition plans, so the combined carrier is “prepared for day one,” Legere said. He'll remain the CEO post-merger, while Carter has been designated CFO. Legere said the carrier will announce the rest of the post-merger leadership team soon.
The Communications Workers of America (CWA), which opposes FCC approval of the merger, should only be allowed to view limited portions of the “confidential and highly confidential” information MetroPCS has provided to the commission, Northrop said Monday in a filing (http://xrl.us/bn9xpv). CWA originally filed a petition to deny the proposed merger in late November, arguing it should only go forward if the FCC included petitions that ensured that no jobs were lost as a result (CD Nov 28 p5). CWA has asked to view MetroPCS-provided information on “competitively-sensitive topics” on the carrier’s current and future business plans, subscriber information, non-public customer service plans and merger details, Northrop said. CWA should only be allowed access to information that pertains to one part of its request, the “impact of synergies upon employment at Newco post-transaction,” he said. Other information is “not germane” to CWA’s concerns about post-merger employment and won’t “assist CWA in ‘ensur[ing] that this transaction translates into a story of growth and opportunity for employment,'” Northrop said.
Progress on the merger came as MetroPCS indicated it had a weak Q4; the carrier revealed Monday that it lost a net 93,000 subscribers. That represented the third consecutive quarter MetroPCS has seen subscriber losses, and was the first time the carrier saw a net loss of subscribers in Q4, said UBS analyst John Hodulik in an email to investors. “We believe this underscores the urgency with which the company pursued merger partners before reaching a deal with T-Mobile.”