Deutsche Telekom offers 'best and final offer' to MetroPCS

Major MetroPCS shareholders that have urged their fellow owners to scuttle the merger deal in the works with T-Mobile might have been heard by Deutsche Telekom after all.

Deutsche Telekom, T-Mobile's parent company, announced today that it has slightly modified the merger agreement between T-Mobile and MetroPCS to make it more amenable to the latter's shareholders. The new terms will see Deutsche Telekom reduce the amount of debt the combined company would take on from $15 billion to $11.2 billion. The carrier will also reduce the interest on those loans by 50 basis points, to make it a bit easier for the combined company to pay it back.

MetroPCS shareholders also expressed some concern that Deutsche Telekom could quickly turn around and get out of the deal within 12 months. In response, the company announced today that it would increase its lock-up period, in which it wouldn't be allowed to sell shares of the combined company, to 18 months.

Major MetroPCS shareholders and some prominent shareholder advisory groups have argued that the original deal, which has been approved by regulators, undervalues MetroPCS' financial worth. As a result, investment firms Paulson & Co. and P. Schoenfeld Asset Management and advisory group Institutional Shareholder Services have been urging MetroPCS stockholders to decline the merger.

Despite those concerns, MetroPCS urged shareholders to approve the initial deal. It's likely that the company will offer the same opinion on the improved deal, but whether the critics will have something else to say remains to be seen.

For its part, Deutsche Telekom said that its latest deal is its "best and final offer," indicating that it won't budge from the current terms.

MetroPCS shareholders are scheduled to vote tomorrow on whether to approve the merger. If it's successful, Deutsche Telekom will own 74 percent of the combined company. MetroPCS shareholders will be paid $1.5 billion and receive a 26 percent equity stake.