I find it strange that I get a couple hundred page bundle in the mail just a few days before the scheduled vote. In it, I can't (quickly) find the basic answers that most people making a decision like this would want to know.
My read is that:
A. I get a couple bucks a share (highlighted over and over) that I have to pay taxes on for a company that I don't want to sell.
B. I get a 25% stake in a highly leveraged company
My questions, if anyone knows the answer:
1. How much cash (not counting loans) is T-mobile pumping into the joint venture?
2. What is the anticipated value of the merged company and based on what assumptions?
3. How/why will the merger benefit the company?
Unless I can digest the 200+ pages and am happy with the answer, I will probably be inclined to vote no.
I believe that the current company is undervalued, which is why I own it. They are profitable and growing with little debt, so I don't understand why they want to burden the company with a huge new debt. If they returned at least most of the current market value in cash or we retained most/all of the new company as shareholders, I could be inclined to vote in favor.
Ironically, I wouldn't mind buying bonds for PCS at 6%, if they weren't about to overload it to the point that it could potentially go under.
I guess for now I'll keep reading. At least the date may have been extended (I need to confirm this still).
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)
So, re your Q's:
1. As little as possible, since DT is probably going to "gradually unload its 74% ... ."
2. This is the $64K question; the only answer right now is "Mr. Market" is valuing the deal at $10.90 for each PCS share.
3. Linquist has sold 1M shares of PCS over the last months; he still holds about 4M shares, but if this deal is good for PCS shareholders why is he selling his shares?
I sold my shares in my taxable account yesterday to avoid the tax consequences of the cash payment (which might be a reason Linquist is selling his shares- but then why have the dividend in the first place?).
As for voting for my shares in my retirement account, I do not know, but I am leaning toward "No."
I voted "NO". I am fairly intelligent, yet I cannot figure out the value of the merger. I have sent e-mails to PCS asking them to clarify the value of each share and have not received any response. So no information.....no vote.
It's pretty simple: at the close, you have half the number of shares at twice the value. (100 shares at 10.00 would become 50 shares at 20.00), plus the cash payout.. If you don't sell at the close, the new value is unknown because the value of the new company is unknown, as is the total number of shares.
In other words, what's X billion dollars divided by Y shares? Without more information, that's a very good question.