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If you purchased shares of the MetroPCS Communications Inc (NYSE:PCS) prior to October 3, 2012, and currently hold any of those NYSE:PCS shares, you have certain options and you should contact the Shareholders Foundation, Inc.
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To have your information reviewed for options and to receive notifications about this case, please send an email to mail@shareholdersfoundation.com, or call us at (858) 779-1554.
Lawsuit Overview
Oct. 15, 2012 (Shareholders Foundation) -- An investor in NYSE:PCS shares filed a lawsuit against directors in effort to stop the proposed takeover of MetroPCS Communications Inc.
On October 3, 2012, Deutsche Telekom and MetroPCS Communications, Inc. announced that they have signed an agreement to combine T-Mobile USA and MetroPCS Communications, Inc.
However, the plaintiff alleges that the defendants breached their fiduciary duties owed to NYSE:PCS investors arising out of the attempt to sell MetroPCS Communications, Inc. too cheaply via an unfair process.
Under the terms of the agreement, MetroPCS will declare a 1 for 2 reverse stock split, pay $1.5 billion to its shareholders (a value of approximately $4.09 per share prior to the reverse split) and acquire all of T-Mobile’s capital stock by issuing to Deutsche Telekom 74% of MetroPCS’s common stock on a pro forma basis.
However, the plaintiff alleges that the defendants breached their fiduciary duty to investors by agreeing to a deal that trades the company's excellent long-term prospects for a drastically undervalued price. In fact, MetroPCS Communications’ financial performance improved lately and at least one analyst set a price target for MetroPCS stock at $18.00 per share.
Furthermore, so the plaintiff, the process is also unfair to NYSE:PCS stockholders as the defendants agreed to terms in proposed transaction that favor T-Mobile USA to the detriment of NYSE:PCS stockholders.
The plaintiff says the proposed transaction is entirely driven by the board of directors and company management, who together control almost $16 of NYSE:PCS outstanding stock.
Certain MetroPCS Communications’ officers and directors will receive millions of dollars in special payments , not being made to ordinary shareholders, for currently unvested stock options, performance units and restricted shares, all of which shall, upon the merger's closing, become fully vested and exercisable, so the lawsuit.
In addition, so the plaintiff, the proposed transaction was designed to ensure the sale of MetroPCS Communications to just one buyer, T-Mobile USA, by agreeing to provision, such as a no solicitation, matchin rights and $150 million termination fee provision, that prevented and prevent MetroPCS Communications from communicating or providing confidential information to other bidders except under extremely limited circumstances.