French company Iliad bidding for T-Mobile US
Jul. 31, 2014
NEW YORK (AP) — T-Mobile US Inc. has another suitor on its hands. Upstart French telecom company Iliad SA on Thursday said it has offered $15 billion for a majority stake in the fourth-largest U.S. cellphone company. Iliad is injecting itself into the courtship of T-Mobile and Sprint Corp., the No. 3 U.S. cellphone carrier. Sprint has reportedly been in talks with T-Mobile for months, but no deal has been announced. Analysts believe U.S. regulators are likely to block the T-Mobile/Sprint pairing due to concerns that it would reduce competition and thus raise prices for consumers. Iliad is much smaller than T-Mobile US, and it doesn't have the financial might to buy the whole company. It's offering $15 billion in cash for 57 percent of T-Mobile US, at $33 per share. T-Mobile US didn't immediately comment on the report. Iliad said it did not have a response from T-Mobile's board. T-Mobile shares jumped $2.07, or 6.7 percent, to $33.01 after Iliad's announcement, indicating that investors believe there's some chance of an improved offer, either from Iliad or Sprint. T-Mobile US is controlled by Deutsche Telekom AG of Germany, which owns 67 percent of the stock. A similar portion of Sprint's stock is owned by Softbank Corp. of Japan. Iliad noted that its offer would not raise the same antitrust concerns that come with a Sprint deal, and that Iliad and T-Mobile US are both industry mavericks. Under CEO John Legere, T-Mobile US has thrown out the standard two-year service contract and introduced new plans that allow for more frequent phone upgrades, a move quickly copied by the larger carriers. Iliad broke onto the French scene with the Freebox, a unit that combines Internet access, TV and phone service over broadband lines. In 2012, it started offering cellphone service as well. Iliad has 5.7 million broadband subscribers and 8.6 million wireless subscribers. T-Mobile US has 50.5 million subscribers on its wireless network.