With the news of the T-Mobile USA and MetroPCS merger just settling, company shareholders have filed a lawsuit trying to block the deal.
According to the TMONews, MetroPCS shareholders are calling the deal "drastically undervalued" and claiming that MetroPCS' board is "conflicted and serving its own financial interests." The lawsuit was filed in Dallas, Texas against MetroPCS, T-Mobile USA, its German parent company Deutsche Telekom, and MetroPCS' CEO and board of directors.
"The process leading to the proposed acquisition was tainted by conflicts, tilted towards T-Mobile and driven entirely by the board and company management, who together control 15.4 percent of PCS' outstanding stock and seek liquidity for their illiquid holdings," the shareholder complaint says, according to TMONews.
Deutsche Telekom struck the merger deal with prepaid regional carrier MetroPCS less than two weeks ago. Theshowed that MetroPCS shareholders would get $1.5 billion in cash and a 26 percent stake in the combined company, while Deutsche Telekom would own the remaining 74 percent of the company. Regulatory approval from the Federal Communications Commission and U.S. Department of Justice is still necessary, so the deal isn't expected to close until the first half of 2013.
"[Metro]PCS' 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," the complaint says.
Deutsche Telekom has declined to comment on the lawsuit and a MetroPCS spokesperson told CNET that "MetroPCS intends to vigorously defend itself against these lawsuits."
T-Mobile CEO John Legere has insisted that the deal is about in an effort to challenge bigger competitors like AT&T and Verizon Wireless.
"This deal is not about simply surviving," Legere said during a press conference call when the merger was announced. "It's about driving growth."
According to TMONews, the MetroPCS shareholders are seeking relief for the companies' alleged breach of fiduciary duty, abuse of control, gross mismanagement, unjust enrichment, and corporate waste. A hearing date has not yet been set.
Updated October 16 at 5:25 p.m. PT with comment from a MetroPCS and a Deutsche Telekom spokesperson.