Rumor: Iliad’s bid for T-Mobile US will be rejected officially tomorrow

iliad

According to a report by the Financial Times, T-Mobile US is set to reject Iliad’s audacious $15 billion bid as early as tomorrow. As far as we were aware, DT had already dismissed the offer because it was too low, but seemingly that wasn’t an official rejection.

“T-Mobile US is planning on rejecting Iliad’s $15 billion offer for the carrier because its parent company, Deutsche Telekom views the offer as too low, the Financial Times reported on Tuesday, citing two people with knowledge of the situation.”

It’s no real surprise to read either. Sprint’s offer of $40 per share far outweighs the $33 per share offered by the ambitious French telecoms company. Even if the European bid comes without risk of being rejected by the FCC and DoJ, it’s still worth it for DT from a financial perspective to press on with the offer from SoftBank/Sprint. If that falls through, the $2B break-up fee will go some way to making the Iliad proposal more attractive.

Via: NYT

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  • Seth

    “Sprint’s offer of $40 per share far outweighs the $33 per share”
    The other factor is Softbank is offering to buy an additional 10.1% of the company at $40. That alone is another $3.2 billion advantage in the Softbank bid. Recall Iliad is talking about snyergies making that remaining 10.1% worth $40 a share. Well Softbank is offering it in cash.

    “If that falls through, the $2B break-up fee will go some way to making the Iliad proposal more attractive.”
    There is slight risk here that if a Softbank bid fails Iliad may not make their same offer. But overall, yes it is a no brainer to reject the Iliad bid.

    • Willie D

      I personally would prefer Iliads offer. Why? Sprint and Softbank have done nothing but introduce anti-consumer plans, harden policies and still have a crap EVDO outdated 3G network, and DOA LTE network that can’t even handle simultaneous voice and data, let alone coverage inside, in a park with a single tree, or outside on a hill in the middle of nowhere. It all sucks and Softbank claims to be the biggest carrier in Japan and an underdog story but they failed to mention, “Biggest WIFI network in Japan, not biggest cellular network” so they already have some truth issues. Sprint merging with TMo, at ANY price, even the $2B payout for failure is a bad deal.

      • Adrayven

        Totally agree. Consumers loose with Sprint/SoftBank.. period.. at least iIiad is known as having a strategy similar to T-Mobile. Uncarrier won’t survive a Sprint/SoftBank buyout.. which you can freaking bet is Sprints goal.. SoftBank in other countries traditionally has raised prices and increased contracts (in a few cases from 2 to 3 years.. ).. NOT looking forward to that.

        SoftBank just can’t do that with a scrappy T-Mobile in the way..

        • Get_at_Me

          It makes you wonder what dt really wants. Would they be happy owning a successful, scale-competitive US carrier or would they prefer to give up majority stake and watch from the sidelines? John Legere has been preaching about scale. Having a lesser known smaller european company buy tmobile us doesnt accomplish that.

      • dtam

        we’re all rooting for a DOJ/FCC to say hell no

      • Seth

        There are two sides to this. The consumer side, which I’m totally with you on and the DT business side. Unfortunately what is good for the owner of 66.7% of T-Mobile isn’t necessarily aligned with their customers/consumers in general here.

    • S. Ali

      If the FCC doesn’t approve they get nothing. DT should be considering that more than the low offer.

      • Seth

        DT would get the $2 billion breakup fee. But that is my point. If that happens, the offer values for T-Mobile likely drop as the two highest bidders have now both tried and failed. I’m just pointing out the flaw in Cam’s logic that assumes the Iliad offer remains the same. I’m not sure it does in the absence of a competitive bidding process.

        • Adrayven

          True, iLiad could easily up the bid to make their offer better.. You generally don’t start out with everything you’ve got.. Unless you’re Sprint and already leveraged to the hilt.. I’m not sure Sprint could come up with more cash than they already have.

        • Seth

          I sort of disagree with you here. I haven’t looked at Iliad’s financials, but most of the WSJ financial type press pieces question whether they can go much higher.

          And on the other part, remember that Sprint was so leveraged to the hilt that they had to sell out to Softbank. Softbank can likely afford to come up with more cash. I’d have more faith in Masa at this point to come up with additional funding than Iliad.

        • UMA_Fan

          There’s nothing to indicate that tmobiles momentum in the market will be worse solely due to a failed merger attempt. It’s how tmobile is performing in the market that will decide their worth.

        • Seth

          Both offers (as nearly every merger/buyout offer is) are above market value. If DT wants to sell and 1) the buyer willing to pay the most can’t buy and 2) there is now only one bidder, there is a risk the offer price decreases.

  • xmiro

    DT is denying the offer, not T-Mobile US. T-Mobile US has no say in this

    • Jay J. Blanco

      Yes tmobile does. There is a board of shareholders. DT being majority shareholder

      • Adrayven

        True.. but since DT practically owns the board.. I doubt there would be much resistance to do what DT wants.

        • Jay J. Blanco

          True.

  • dunkinchris
  • mingkee

    15 Gig is a major insult to us!!!

    • josephsinger

      Do you even hesitate for a moment before you send what you wrote?