Loophole Allows Deutsche Telekom To Sell T-Mobile USA Shares Before Lock-In Period Ends

deutsche-telekom

Deutsche Telekom Chief Financial Officer Timotheus Hoettges spoke early this morning and said that the majority shareholder of T-Mobile USA can sell the company to a buyer before the 18-month share lock-up period is over. Hoettges spoke to shareholders at the annual Deutsche Telekom meeting in Cologne, Germany earlier this morning. His comment was in response to a question from an investor who named Vodafone as a hypothetical buyer for T-Mobile USA.

In its attempt to “sweeten the deal” for MetroPCS shareholders, the German telecommunications giant pledged not to sell its shares of the new company until after 18 months had expired. As of today, the 74% stake in T-Mobile USA is worth $14.2 billion.

“There is an exception clause in the contract regarding the lock-up,” said Hoettges, who will take over as Deutsche Telekom’s chief executive officer next year. “We are in a position to sell all shares in one go.”

The comments are somewhat mysterious in light of T-Mobile USA CEO John Legere who recently stated that consolidation in the US wireless industry is both “necessary and inevitable.” Legere went on to say that T-Mobile will take part in some of that consolidation.

Mysterious!

Bloomberg

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  • hurrpancakes

    I know some of these words.

    • Alex Zapata

      I’m calling your bluff.

  • Bryan Sandoval

    Its called if the offer is good were for sale

  • Graham Blackadder

    Uh oh I know the word vodafone means Verizon on this side of the pond. But then again if att couldn’t do it then Verizon or their owners surely couldn’t do a take over. Could they?

    • Jose Hernandez

      I don’t think AT&T or Verizon could pull this off. If Vodafone did this, they would have to keep T-Mobile an independent company. Not sure how that would work. Maybe DISH, or GOOGLE or someone like that?

      • Graham Blackadder

        I for one would love Google to buy our beloved magenta should it actually be for sale at the right price.

    • Baxter DeBerry

      vodafone and verizon wont try.. they wouldnt be able to make a great argument for it.., not even sprint could.. another outsider or dish could though

      • Graham Blackadder

        I’m not saying for a second they will or could but the ” hypothetical” mention of the Vodafone name sends bells ringing or at least chiming. No smoke without fire way of thinking that’s all.

    • xmiro

      Verizon and AT&T stand no chance of acquiring T-Mobile, so they are completely out of the picture

  • D Velasquez

    and if the offer is good i welcome Telenor, Telia, O2 heck i would even jump in one leg if tomorrow Docomo decides to buy Magenta

  • N1Ro

    I will have no problem if Vodafone cash out its Verizon share and completely buy T-Mobile USA.

    • Graham Blackadder

      They sell their Verizon shares then buy T-Mobile? You would be happy T-Mobile being run like Verizon?

      • N1Ro

        Of course NOT. Vodafone is Vodafone they have nothing to do with Verizon besides they cash out 45% of Verizon’s earning each year.

        You know how many arguments Vodafone lost during this partnership with Verizon? Including pushing the company to adopt WCDMA 3G in early 2000s but Verizon went with EVDO anyway…

        All I am saying is if the parent Deutsche Telekom decides to exit the the next similar parent company which is both bigger and better in my opinion is Vodafone.

        • Graham Blackadder

          Having had many years dealing with Vodafone while growing up in England I personally would be distraught of they buy T-Mobile. Personal preferences and opinions is why we all comment here

  • Alex Zapata

    Please Vodafone, stay away from T-Mobile.

    • TBN27

      What’s wrong with Vodafone? I know they suck bad in Europe from what I have heard but I rather then than Dish Network.

      • bleeew

        Look up Verizon.

        • Adrayven

          Vodafone wants out for lack of control.. Verizon still has majority call when it comes to policies.. don’t assume Verizon policies reflect theirs.

      • Alex Zapata

        There isn’t too much inherently wrong with Vodafone, but I’d like to see T-Mobile/Metro as their own company for a while.

  • edfranco1

    Google Please make an offer.

    • Alex Zapata

      The biggest thing Google would bring to T-Mobile would be increased backhaul. Probably insanely HUGE gobs of backhaul. Which I’m completely fine with. 10Gb to each tower please?

  • pastorfarley

    DT’s preference was to exit the US market by selling. Failing that they are participating in the inevitable consolidation. They still want out, at the right price. The question was referenced to Vodaphone, who is unhappy with VZ control but needs the US market cashflow to keep their shareholders happy.

  • SouthernBlackNerd

    Looks like Ergen will be getting his wireless company after all. Once the softbank deal is formally accepted by Sprint shareholders. I expect dish will make an offer for T-Metro.

    • xmiro

      I personally see that as the likeliest scenario. I get the feeling Dish is angling to exit Satellite and deliver video via wireless instead

  • Jay J. Blanco

    It would be good if Dish made a offer. More spectrum is a plus and Dish is a American company. I think if T-Mobile and Dish pull the right cards they could make T-Mobile more aggressive with deploying a better Network and bring more jobs to the US.

  • Whynot

    I would be thrilled to see Google pick Magenta up. I’ve been interviewing there for a few years now in the Kirkland offices, and it would be a great way to get in the door there. Talk about a stepping stone opportunity. We all knew DT would bail. I lived in Munich for almost 4 years, and T-COM is huge there (also the sponsors of the best FC – FC Bayern). I went with O2 while I lived there – which was great by the way, but I had a lot of friends who loved T-COM. We all know that DT has wanted an exit strategy from the US market since 2011 – also, looks like T-Systems in China might be up next, but I welcome our new Google overlords (if it happens, please!). No Vodaphone please, I used their service in the UK – rubbish.

  • Just me

    Dish + Google + T-Mobile = G-Mobile.

    Pretty please? <3

    • Zacamandapio

      What?
      No Way.
      Dish + Google + T-Mobile = G-Mobile?
      Nah,
      Dish + Google + T-Mobile = GSpot-Mobile.

    • Trevnerdio

      No Dish.

  • macman37

    If Vodafone buys T-Mobile USA, then technically T-Mobile USA and Verizon Wireless are almost considered 1 company. Remember, Vodafone owns 1/2 of Verizon Wireless, while the other half is owned by Verizon Communications.

    • TBN27

      Not really or at all. Verizon is in the process of trying to by back the 50%+- ownership of Verizon wireless from Vodafone. If they succeed, then Vodafone can buy T-Mobile US and be the owner of that alone.

      • SouthernBlackNerd

        The buyback has already hit a snag and Verizon has said that part of the deal would be Stock and Debt, so Vodafone would still have a share in Verizon. I doubt the FCC or DOJ would okay a Tmobile buyout while they had anything to do with Verizon.

        Second, I do not think Vodafone wants to get into the driver seat. They have enjoyed being a passenger, while collecting their dividend checks. Tmobile needs a company who is going to invest in it. I do not see Vodafone being that company.

      • xmiro

        Vodafone has 40% of Verizon Wireless, Verizon owns 60%

        • Zacamandapio

          45/55

        • N1Ro

          Yeap, Vodafone owns 45% of Verizon Wireless

        • Adrayven

          Because of the lower ownership they can’t do some of the things they want, so exiting I guess is attractive if Verizon board can come up with the cash..

    • Graham Blackadder

      Vodafone would have to sell their shares in Verizon before they stood any chance of a take over let alone federal approval

  • fsured

    Wow that sounds shady. Well I would assume Metro and the regulators were aware of any clause in the deal that has DT back track on sale terms.

    Well played DT, well played.

  • kev2684

    Dear Santa.. please tell Larry Page to buy T-Mo….

    • Marcelo_L

      Ho..ho..ho……..I see a lump of coal in Larry’s sock if Google doesn’t buy TMo….

  • xmiro

    So let’s see.

    Verizon is trying to kick Vodafone out who supposedly wants $130billion for their 40% share of Verizon Wireless, which also represents a huge chunk of Vodafone’s overall revenue globally and not having that is just, well not good for them. Vodafone also doesn’t have to sell if they don’t want to no matter how much Verizon Wireless is trying.

    - Vodafone exiting Verizon Wireless, with cash and spectrum, then turning around and buying T-Mobile to keep their US access.

    - Softbank wants Sprint + Clearwire for the spectrum which is quite a lot, and they’ll probably get them, eventually.

    - Dish network has money but they are trying for Sprint, which would probably fail, eventually, so they would be another likely suitor for T-Mobile.

    - Carlos Slim has money too. Maybe he would step in snatch T-Mobile he already has Tracfone/NET10

    • Zacamandapio

      Yeah,
      I was thinking of Carlos Slim empire as well. But the way he conducts business is not that nice. But since this is the US he would be up for competition. That would end up opening a lot of deals to Mexico, Central and South America since his empire covers all that.

  • rob

    all of you are forgetting one thing. Remember apple wants in too………

    • mikey

      Of course with the new uncarrier plans and unsubsidized handsets a lot of big players will be willing to take over the fourth largest carrier. Can’t forget about Wal-Mart either, they already have exclusive T-Mobile plans with family mobile so I’m sure they would like a piece

  • superg05

    if they do that they should be banned from doing any business in the united states permanently

  • ILikeRice

    Google; Googel; El GOOG. Whatever… Take Magenta, please. Let this be the revolution of the US carrier system and keep that great friendship with Samsung. We will persevere. GO FORTH, my super LLAMAS.

  • 21stNow

    David, I hadn’t seen this post yet when I submitted the article earlier this evening.

    I see that Hottges will become CEO of DT next year. I thought that they were referring to T-Mobile earlier.

  • TMoFan

    DT is pretty slick to add this clause in but it’s no surprise to me. They have made it no secret that they want out. Only difference is that this way is longer and less money. Dish is eager to get into the game which opens up a deal with T-Mobile and I think a more likely scenario.

    • Adrayven

      Lord, if Dish bought it, I’d be leaving so quick you would miss my shadow going bye…

  • Nearmsp

    Vodaphone will do a cash out from Verizon Wireless where as minor owner it has no rights. It will retire some debt in UK and then invest the remaining in T-mobile USA and at some stage rebrand it as Vodaphone. Vodaphone is the largest wireless company in the world and has been looking for a North America franchise.

    • N1Ro

      +1
      But it is called Vodafone :)

  • briankh

    Honestly, I would rather have Vodafone the majority holder rather than T-mobile. T-Mobile has been wanting to exit the US while Vodafone wants to enter as a majority holder. Vodafone has the money and desire to expand services in the US. I have used Vodafone in other countries and have family who have Vodafone service and are very happy with them.

    • N1Ro

      Exactly. The only other company that is in the similar league with T-Mobile is Vodafone, in fact in my opinion Vodafone Group is in a much higher scale than Deutsche Telekom and their T-Mobile. T-Mobile Brand is fading out in Europe, especially after the recent merge with Orange in UK to create EE. Sad, but is happening…

      Vodafone is bigger, like A LOT BIGGER with true GLOBAL present and it has the same policy of T-Mobile USA of putting people and their needs first, like T-Mobile USA. Totally the opposite from Verizon which they use the “cow money-milk” policy. On top of that they are they are passionate to introducing and adopting new technologies acting the same way with T-Mobile USA. For example like T-Mobile here is the only major provider with Internet Calling, Vodafone is the only provider in some European countries offering similar solution, they even offer a Vodafone HSPA/LTE Router that connects to your home internet and broadcast HSPA/LTE signal for better in house coverage and basement coverage.

      For me Vodafone is the best candidate and I am going to be thrilled if they make the move and step into buying T-Mobile USA. The other scenarios are varying from medium to super scary.

      Here are some that I can think:

      1.MetroPCs and the rest of American Shareholders can buy the majority of Deutsche Telekom share and keep everything the same moving forward, that is actually a good scenario.
      2. I do not really see Google stepping in, it it does will be another great scenario.
      3. Dish buys T-Mobile — DISASTER
      4. A merger with Sprint — DOUBLE DISASTER
      5. Docomo has strong relationship with AT&T
      6. Verizon and AT&T are out of the question since the authorities already blocked the merger with AT&T
      7. All other scenarios of O2, Orange etc, will be a huge downgrade for T-Mobile USA taking the company in a much smaller leaque that it currently is with Deutsche Telekom.

      So in my opinion, if a change of ownership is about to happen, Vodafone is the only option that can upscale the company in a higher league overnight and can guarantee, even upgrade T-Mobile’s current innovative moves and policies moving forward.

      • xmiro

        Dish has spectrum, which T-Mobile needs. They also have a CEO that doesn’t seem to like or care about the status quo seeing as what he’s doing with Slingbox, Hopper DVR etc. Not sure how that’s a disaster

  • Chimphappyhour

    I’ve used Vodafone in other countries. No thank you.

  • N1Ro

    I was about to suggest to the admin to register and park the domain vodanews.com, just in case, but its already taken from some Korean news company…loool

    • http://tmonews.com David

      Haha don’t worry, should a move happen, I’ve got a lengthy list of domain entries to try.

  • Zombiexm

    So do you all see them leaving if they keep bringing in new users like they have so far? or is this them venting if they start sinking again they will either sale all the stock or some of it? Please no Dish, there CS sucks. and we do not need there wireless video idea to hog tmobiles network unless they are willing to update all the towers backhual.

  • truckeemike

    Here we go again… Screw You DT…..

  • you

    At this point as long as their initial debt is paid off DT is ready to move on. T-Mobile is just not profitable enough and there is little chance that debt is paid off without having to invest more than its worth in the US market. The reality is that there is also little chance of T-Mobile catching even Sprint at this point. With their infusion of cash from Softbank and their acquisition of US Cellular spectrum they are now the owner of more on hand spectrum than even ATT and Verizon. Only a matter of time before they deploy those resources.
    T-Mobile is built to provide service but not compete with the big boys. They just don’t have the resources and Metro PCS isn’t going to change that…

  • macman37

    This may be T-Mobile’s former CEO Phil Humm’s idea; he did leave T-Mobile USA for Vodafone.

  • TYLERDERK

    SPRINT and T-mobile will merge into one BIG player in the market and then hold on to your panties Verizon and ATT.

    • racers15

      Sprint will destroy T-Mobile like they did Nextel. CEO of Sprint is corrupt to the core.

  • Nikato Muirhead

    This is where Dish should look if Sprint fails. Even if a Sprint partnership is all that happens between Dish , Sprint, and Softbank, Dish should still gobble up T-Mobile.

  • racers15

    Google is already so intrusive. Practically all of their services require that you enter your phone number to use a google related account, which means they want to know exactly who you are and track everything you do on the internet so they can then sell the information for marketing purposes. They already bought out sites like YouTube and Craigslist, and whenever possible I’ve always resisted connecting my phone number with google accounts because I don’t need that kind intrusiveness. I can only see their intrusiveness getting much worse if they were to acquire T-Mobile and have access to all of T-Mobile’s customer base data and account information. I think in that case I would rather see Dish or Vodafone take over rather than Google. Best scenario would be DT holding on to T-Mobile for several more years while T-Mobile continues to strengthen it’s position as it has been for the past few years. Maybe T-Mobile could acquire a few more smaller carriers like it did MetroPCS, and at that point, be in a strong enough position as to buy it self out from DT, and stand on it’s own two feet as an independent company. I like T-Mobile as it is, not as companies like Sprint or AT&T would like to make it.

  • racers15

    Google is already so intrusive. Practically all of their services require that you enter your phone number to use a google related account, which means they want to know exactly who you are and track everything you do on the internet so they can then sell the information for marketing purposes. They already bought out sites like YouTube and Craigslist, and whenever possible I’ve always resisted connecting my phone number with google accounts because I don’t need that kind intrusiveness. I can only see their intrusiveness getting much worse if they were to acquire T-Mobile and have access to all of T-Mobile’s customer base data and account information. I think in that case I would rather see Dish or Vodafone take over rather than Google. Best scenario would be DT holding on to T-Mobile for several more years while T-Mobile continues to strengthen it’s position as it has been for the past few years. Maybe T-Mobile could acquire a few more smaller carriers like it did MetroPCS, and at that point, be in a strong enough position as to buy it self out from DT, and stand on it’s own two feet as an independent company. I like T-Mobile as it is, not as companies like Sprint or AT&T would like to make it.