MetroPCS urged shareholders on Tuesday to approve the cellphone service provider’s merger with T-Mobile USA, in the face of rising opposition from two major hedge funds.
MetroPCS’s chief executive, Roger D. Linquist, argued in a letter that the complex merger, which will give existing investors a 26 percent stake in the combined company, was the best possible option for shareholders. Mr. Linquist added that the company had considered various alternatives, but concluded that it would best grow by becoming the top low-cost cellphone service company in the country.
“If stockholders do not approve the proposals related to the proposed combination, there is no assurance MetroPCS will be able to deliver the same or better stockholder value in the future,†he wrote.
The letter on Tuesday came as two of the company’s biggestinvestors, Paulson & Company and P. Schoenfeld Asset Management, claimed that the deal would leave the combined company with too much debt. The two hedge funds also protested the split of the combined company’s shares, arguing that MetroPCS shareholders should own more.
Together, the two firms hold more than 10 percent of MetroPCS.
In his letter, Mr. Linquist argued that the debt the combined company was taking on was in line with industry peers, and the interest rates would be comparable to what others were paying in the market.
A vote on the merger is scheduled for April 12.
