P. Schoenfeld Asset Management LP said it will withdraw its proxy campaign and support the revised combination of MetroPCS Communications Inc. and T-Mobile USA Inc., the wireless subsidiary of Deutsche Telekom AG.

After a prolonged dispute with PSAM, which holds 2.5% of MetroPCS, over the fairness of the deal, Deutsche Telekom reduced an intercompany loan by $3.8 billion to $11.2 billion and lowered the rate by 50 basis points. The changes, including an extension to the lockup period for Deutsche Telekom on shares in the Newco, of which it will hold 74%, meet most of PSAM's initial requests and obtain superior value for MetroPCS shareholders. The ownership split of the new entity, with MetroPCS shareholders holding 26% of the company, was also a point of dispute, but not as important as the debt issue, a source close to the matter said.

Paulson & Co., with 9.9% of MetroPCS, and which supported the PSAM position, has come out saying that, while it must review revised proxy materials, it now also intends to support the deal. Paulson had said previously that a reduction of the intercompany debt by $6.6 billion and a lowering of its interest rate of 4.2% would win its support. Paulson said the debt reduction and interest rate reductions are material improvements for MetroPCS shareholders and strengthen the pro forma company.

A $1.5 billion payment to MetroPCS shareholders remains unchanged in the revised deal.

The shareholder vote on the transaction has been postponed to April 24.

Deutsche Telekom said the deal can close shortly after the vote.