Summary:

MetroPCS’s largest shareholder is now opposed to the merger. Opponents still don’t have the votes to derail it, but if more institutional shareholders join their cause, Metro and DT may be forced to alter the terms.

T-Mobile is anxious to close out its merger with MetroPCS so it can begin the swallowing the regional operator’s spectrum into its 3G and 4G networks, but MetroPCS’s biggest shareholder, hedge fund Paulson & Co., isn’t eager to see the deal rushed.

In a statement distributed to financial media, hedge fund manager John Paulson said it would vote its 9.9 percent stake against the merger deal as it stands today. The complex deal would see Deutsche Telekom merge its U.S. arm into MetroPCS, creating a new publicly traded company and paying Metro’s shareholders $1.5 billion in cash. According to Paulson, that just isn’t enough.

According to the Wall Street Journal, Paulson said he would reconsider his position if Deutsche Telekom and MetroPCS could restructure the final company’s debt, lower its interest rate, pay more cash to Metro shareholders or give them a bigger portion of the merged company. Paulson said he believes there are potentially more lucrative deals in the offing, based on interest shown in Metro by Dish Network and Sprint.

Paulson now joins hedge fund P. Schoenfeld in opposing the merger. Together they own about 12 percent of the company, which isn’t enough to derail the deal, but if they can attract other investors to their cause, the Metro board could have a problem on their hands.

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