MetroPCS Shareholders: Stop This Madness!
An unhappy group of MetroPCS (NYSE:PCS) shareholders have filed a lawsuit in Texas to halt the company’s proposed merger with Deutsche Telekom’s (DTEGY.PK) T-Mobile USA.
The plaintiffs argue that the merger deal in place is “cheating shareholders” and would unfairly benefit MetroPCS’s executive board and management, whom the plaintiffs claim arranged the deal without shareholder input or interest in mind.
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The lawsuit states “MetroPCS’s officers and directors will receive millions of dollars in special payments – not being made to ordinary shareholders,” and that the worth of MetroPCS has been “drastically undervalued.” Under the deal’s terms, MetroPCS would declare a 1-for-2 reverse stock split and pay $1.5 billion in cash to its shareholders, or $4.09 per share.
The concerned shareholders believe the company’s executives rigged the deal to ensure Deutsche Telekom would be the only serious bidder and are seeking an injunction that would halt the merger, as well as relief for other claims including abuse of control, gross mismanagement, and corporate waste.