French telecom Iliad is reportedly planning to place a second offer to T-Mobile U.S.
Iliad first made an offer to T-Mobile in August this year for $15 billion in cash, or $33 per share, to acquire more than 50 percent of the U.S. telecom giant and prevent its potential merger with Sprint. Eventually, the merger was cancelled after receiving opposition from certain competitors who argued that the merger will create an impossible competition in the market.
A month later, T-Mobile's parent company Deutsche Telekom reportedly discussed in a meeting that it might sell the company at $35 per share. During that time, Iliad did not comment if it plans to increase its bid. But, Iliad CFO Thomas Reynaud confirmed that they are in talks with different private equity firms and companies that want to be part of their acquisition deal with T-Mobile.
On Thursday, sources of Bloomberg said that Iliad decided not to increase its original bid of $33 per share for 57 percent shares of T-Mobile. The executives will have a meeting with Deutsche Telekom to reach an initial agreement.
Germany-based Deutsche Telekom was reported to have informal yet regular communication with Iliad but has not agreed whether the new offer will be enough for the company shares as it is lower than the expected value.
The new bid was finalized after Iliad became successful in convincing partners to support them financially in the acquisition plan. The company conducted discussions with some investors about the bid, including KKR and some international banks.
CNET reported that Deutsche Telekom confirmed that it had received the proposal from Iliad but refused to provide further details. T-Mobile CEO John Legere also refused to answer questions about the deal during the earnings conference call.
A deal with Iliad is more likely to go through to the U.S. regulators compared to Sprint as it is a French company. Iliad wanted to acquire T-Mobile as it sees it as an opportunity to penetrate the U.S. market.
