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MetroPCS Communications, Inc. (PCS) RSS Feed

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Created
06/23/00
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MetroPCS Communications, Inc. (PCS)- T-Mobile

On October 3, 2012 Deutsche Telekom- DT (DTEGY), announced that T-Mobile will be merged with PCS.  The transaction is structured as a recapitalization in which PCS will declare a 1 for 2 reverse stock split, a cash payment of $1.5B to PCS shareholders (about $4.09 per share) and acquire all of T-Mobile's capital stock by issuing to DT 74% of PCS' common stock on a pro forma basis.  This gives PCS shareholders a 26% stake and about $4.09 a share in cash.  

The deal is expected to close in the middle of next year, 2013.

James Moorman at S&P lowered his 12 month target price of PCS to $12 from $13 on 11/2/12 and still has a "Hold" rating on PCS.  He says the deal values PCS between $11.50 to $13.50 a share.  He also said he thinks Sprint will not offer a competing bid for PCS.

On November 30, 2012, Shing Yin, an analyst at Guggenheim stated that Sprint could make a new offer for PCS between $12 to  $13, which he calculates would equal about a 45% stock offer from T-Mobile instead of the current 26% per the current T-Mobile/ PCS deal.  Thus, Yin believes PCS is worth about what it is trading at on 11/30/12, about $10.65 a share in the current T-Mobile/ PCS deal.  SEE post #466.

Joel West wrote on October 3, 2012 in his Seeking Alpha article: "I would presume that DT hopes that it will be able to gradually unload its 74% holding in the combined company through open market sales."

It is expected that once the transaction is completed the ticker symbol for PCS will change "since T-Mobile USA will retain its name, technology, HQ and CEO - while MetroPCS will lose all four." (West)

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