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France’s Iliad to increase T-Mobile bid

Iliad will increase their bid for a stake in T-Mobile.
By
October 3, 2014
FrenchIliadWirelessMergerTMobile

French telecom operator Iliad is preparing to increase their bid for a “significantly larger” stake in T-Mobile, according to Bloomberg. In the past few weeks, rumors have leaked that Iliad is raising as much as $5 billion from investment firms in preparation of their new bid.

Previously, Iliad proposed buying a 56.6 percent stake in Deutsche Telekom’s U.S. unit at $33 for each T-Mobile share. Iliad is still offering $33 per T-Mobile share but wants to buy more shares from Deutsche Telekom. Iliad’s new offer will give Deutsche Telekom more total cash and a smaller remaining stake in T-Mobile.

Since 2011, Deutsche Telekom has tried selling T-Mobile due to their belief that they see the US market as “too small to compete” with Verizon and AT&T having such a stranglehold on the market. In August, Sprint dropped its bid to acquire T-Mobile after agreeing to pay $40 per share.

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Seeing that Iliad has never operated in the U.S., Iliad’s purchase would likely not see anywhere near the regulatory pressure that either AT&T or Sprint had when trying to buy T-Mobile. Additionally, Iliad has previously self-imposed an October deadline to close a preliminary deal with Deutsche Telekom for the sale.

Iliad hopefully is prepared for what they have coming if their bid is accepted (and approved by regulators). T-Mobile has approximately 50 million subscribers while Iliad has just 8.6 million wireless subscribers along with 5.7 broadband subscribers in the French market. Thankfully as SlashGear notes, “it’s almost a sure thing T-Mobile would remain as-is.” That is good news for current and future T-Mobile customers.