Iliad gives up on buyout after T-Mo and DT chiefs “refused to entertain its new offer”

The logo of French low-cost telecoms provider Iliad is pictured during the company 2013 annual results presentation in Paris

Iliad has been pursuing T-Mobile US ever since the alleged deal with Sprint was reported as dead and buried. Initially, the French telecoms company bid for 56.6% of the company, a bid which was rejected out of hand for being far too low. Since then, Iliad has been on a search for financial partners, approaching a number of companies and banks to secure enough cash/debt to raise its bid.

It’s been revealed by the company today, that it has had a second bid refused and is now ending its interest in T-Mobile US. The new offer was worth $36 per share for 67% of the US carrier.

Iliad announced the change in plans in a press release this afternoon:

The Iliad Group announces that it puts an end to its project of acquiring T-Mobile US, following exchanges with Deutsche Telekom and selected board members of T-Mobile US who have refused to entertain its new offer. 

For anyone following the rumors this past couple of months, this should come as no surprise. Legere himself stated in an interview with GeekWire that T-Mobile is capable of growth and has a bright future on its own. It doesn’t need to be bought out, and doesn’t need to merge with another carrier even if that would speed growth up a little. We also heard a little while back that T-Mobile wasn’t interested in being purchased by a company unless it had an existing U.S. subscriber base and U.S. spectrum.

You can read Iliad’s full press release here.

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  • dafreeds

    We don’t need them. I feel a better offer coming from someone with some serious spectrum to use.

    • SaggyBallsHD

      Dish has a ton of spectrum…

      • Dish has a ton of Dish…

      • Tinger12

        You want to be nickle and dimed to death? Keep Dish’s and Charlie E’s hands off TMobile.

        • SaggyBallsHD

          T-Mobile would still run itself as a standalone company. You’re thinking doom and gloom for no reason.

  • javid

    so what about / where does this leave… Dish?

    • vrm

      I don’t think that will be viable either. Dish needs to borrow heavily to buy t-mobile, just like Iliad. I think that would be the case for most potential buyers. It would be difficult for a buyer to then invest in the co. (capex).

      The only co. I can think of that makes sense is vodaphone ( they are flush with cash) but they have shown no interest.

      • Sami

        Vodaphone has a huge stake in Verizon wireless, have you not done your research?

        • kev2684

          Verizon bought them back a while back.

        • Vodaphone sold its stake in Verizon. Have you not done your research?

  • vrm

    Interesting that they rejected $36/share even though DT said anything >= $35/share was worth considering. IMO, they may only consider an offer if it is really good, going forward.

    • Adrayven

      DT is german, and they hate the french.. They likely said no out of spite…

  • Frankie

    Such a shame. Iliad have a track record of slashing prices. The same strategy would have been extremely beneficial for US consumers. Mobile prices here are far more expensive than the rest of the world. This could’ve seriously sparked competition.

    I think TM/DT will have a difficult time justifying this latest offer rejection.

    • Paul Garrison

      It may be a shame on some level, but you have to make serious offer to taken serious.

      • Seth

        An offer that is a 20% premium to what the stock is trading at right now is a fairly serious offer. DT clearly wanted more though.

        • Paul Garrison

          Clearly, and I don’t know if its just money.

    • UMA_Fan

      US carriers also have to cover a larger geographic area than most international carriers you are relating it too.

  • Mike

    Perhaps its Dt way of taking tmo off the table??? Who knows.

  • Ordeith

    Here’s hoping T-Mobile didn’t just make a colossal mistake.

    • TMUS stock has been in a downward trend for months in spite of positive results. When Iliad offered $32 per share, it was in the ballpark of its market price. Now, when TMUS trades for about $26, $36 per share should have been grabbed by DT, for it probably won’t see another offer with almost 40% premium.

      • archerian

        All the hoopla around uncarrier is dying down. The latest uncarriers are rather lame. JL is milking an empty cow.

        • Adrayven

          No really. Stock rarely reflects company performance these days. It was up with rumors of buyout was immediate and when rumors said 32 per share.. guess where the ceiling for the share price was? 32 per share.. durrr..

          WS doesn’t care about Uncarrier.. seriously.. it never has..

        • archerian

          Uncarrier was a means to get more consumers, but not necessarily at higher ARPU. Now what does T-mobile have to get more consumers? The stock price might not be dictated by Uncarrier but it has certainly been influenced by it. No Uncarrier and what does T-mobile have? A thrash talking CEO who thought he would pump and get a Golden Parachute late 2014?

  • Aurizen

    Comcast will buy them and let John Legere take over. talk about deep pockets lol

    • Adrayven

      Talk about an Anti-trust waiting to happen.

      • Ay Caramba

        Please explain what the anti-trust issue is? Is it because of Comcast’s huge cellular business or T-mobile’s huge cable/TV business?

  • sosarozay300

    as long as john legere is the leader idc who buys tmobile

  • Kinery

    Why doesn’t Orange (France) and Vodafone (UK) bid on Tmo?

    • Paul Garrison

      I don’t think any of them want to have to deal with the unfair business practices of AT&T, Verizon, and the pay for play political system.

      • EG

        LOL!

      • Josh Robert Nay

        Best comment I’ve read all day.

    • Vodafone just got out of the US market by selling its stake in Verizon. As for Orange…

  • Peter Truong From Riverside CA

    I am happy where T-mobile is at right now. T-mobile doesn’t need a buyer to make it better.

    • Milton F

      Great analysis!

    • monkeybutts

      It needs a buyer that is willing to invest extra money, especially for the upcoming spectrum auctions.

  • Jay J. Blanco

    Wow

  • Mike Palomba

    I really think a TV and Internet provider needs to buy T-Mobile. Veizon has fios, ATT has U-Verse ( and soon directv), and Sprint may be partnering with Dish. T-Mobile needs to take the next step into expanding their business before it’s too late.

    • Larry Griffin

      why doesnt Tmo get with comcast!! that would probably be one of the best mergers possible. and they can allow comcast to distrubute their new routers to new comcast customers as well

      • Mike Palomba

        Because comcast is terrible. No one likes Comcast. A merger with twc wouldn’t be bad though. T-Mobile and TWC a would make a great combo IMO

        • Larry Griffin

          Sorry but Comcast just bought out Time Warner……
          ive had comcast for years here in Atlanta and i loved it
          recently had to get rid of it because i moved out of their service area

        • Larry Griffin
        • Mike Palomba

          The merger hasn’t been approved yet and many people are expecting it to be blocked. Also majority of Comcast customers complain about both quality of service and quality of customer service

        • E1

          Comcast is in good with the current administration. Consider it a done deal. In the meantime, enjoy and dog and pony show for the unwashed masses.

        • JB45

          ummm Comcast and TWC are merging

        • Mike Palomba

          Once again it hasn’t been approved and is facing a lot of regulatory scrutiny

        • JB45

          http://www.timewarnercable (dot) com/en/about-us/press/twc-to-merge-with-comcast.html

      • Newmexican

        NOT – Comcast are about the most sleazy big business in the US. It is shocking that they are still allowed to do business in this country. They seem to be above the law – shame on you DOJ to not go after them considering the now public knowledge about they business practices.

        In the last 2 weeks they shipped me two new cable modems that I have not ordered. And the second one was shipped, when I called them and asked for a return label for the first one. Go figure …..

    • TV? Is it that 20th century thing that barely anyone cares about anymore?

      • Cheese Heads

        TV is America’s past time like football and baseball! It lives on and everyone needs it. You should try one?

  • Larry Griffin

    is DT is so adament about getting rid of Tmobile then why havent they done so already … i dont think tmo is going anywhere anytime soon

    • fentonr

      Pure speculation, but i think that might be changing. I think that DT has seen their European businesses stabilize somewhat and TMUS take off like crazy, I think they are starting to and will continue to see benefits in TMO’s growth which can hide the European problems to some extent while they work on turning then around and I think they’re beginning to see that a regular dividend/return from TMUS isn’t something that could only be achieved after decades more massive investment.

    • Adrayven

      Greed over and above anything else. They think they can get a lot more now with T-Mobile on the rise.

      Make no mistake, someone comes in with the right offer; they will sell. No blinking, just done.

      • bob90210

        You make it sound like it is a bad thing. If someone is offering you money for something and you think it worth more, you will wait for a better offer. We are talking about shares of stock in a company, not your first born. Sell if the price is right, don’t if it is not.

  • Seth

    The last paragraph of the article is a bit of rubbish. What Legere or T-Mobile wanted in a suitor really was never relevant. All along be it Iliad or Softbank or undisclosed other bidders this was about buying part or all of D-T’s 66.7% ownership stake directly from DT.

    • Adrayven

      Agreed. Them saying no had nothing to do if it was a fit.. DT doesn’t care. The price just wasn’t right. DT thinks they can get much more..

      Anyone who thinks DT is looking out for T-Mobile’s interests is very naive. It’s all about the $$$

  • archerian

    This is the highest T-mobile can possibly get – Uncarrier initiatives will fizzle out soon enough and other carriers will re-group and once again the cool factor T-mobile had with Uncarrier will be lost. And let’s be honest – not all Uncarrier plans maximize shareholder value to begin with.

    • fentonr

      I don’t think so. The other carriers have done a terrible job matching T-Mobiles’ offers. Not all of the uncarrier moves have been big splashes, but they’ve all been very nice for their customer base as a whole even if any particular customer doesn’t use a feature. When it was announced, I didn’t figure I’d use the free international roaming for a really long time, if at all. Two days ago I was told that yesterday I was going to England for work and I’m now writing this message because T-Mobile has free international data. It makes for a great full package and I’m really glad I have T-Mobile.

      • archerian

        Other carriers won’t match T-Mobile offers if it hurts their bottom line which is the fiscally responsible thing to do. I heard JL say he was looking at around 5-7% margins, which is very low for the industry. This will depress the stock price. I totally understand how you dig the new features T-Mobile offers but from a shareholder perspective monetization might not be happening with all these features. Having happy customers is secondary to having high arpu customers. Not saying both are mutually exclusive but given a choice what would any company pick?

        • I am a consumer and couldn’t care less about the shareholder. And there are many more consumers than ARPU customers.

        • archerian

          Therein lies the problem that T-mobile will face soon – now they are doing everything to please the consumer, but they are a publicly traded company – they will soon have to pay the piper. Btw, what do you mean by there are many more consumers than ARPU consumers? Did you mean there are more users who can switch? Most if not all incentives to switch are already out.

        • TechHog

          ARPU = average revenue per user

        • philyew

          Where did you hear Legere talking about 5-7% margin? One of the last official statements with a recent quarterly report talked about target EBITDA margins in the region of 35%, compared with numbers in excess of 50% for the big two.

          This is a highly skewed business sector as a result of the fact that it already suffers from unhealthy market concentration. While you can argue that there is a fiscal responsibility to maintain market value for all publicly traded companies, there is a bigger picture, which is that the market values for VZW and AT&T are inflated by a failure to maintain adequate anti-trust controls in the wireless industry. It’s necessary, one way or another, to burst those 50% bubbles and, at the moment, TM are playing a part in that.

    • dtam

      Hence why they are building out their network. Once they have a better network then they can compete even more against the big 2

      • archerian

        they could possibly compete more, but their ARPU wont increase unless they increase prices or get into side businesses like used phone market, insurance etc.. if T-mobile could, do you think they would compete on price and services? They would rather charge more and keep the money but with what they have, price is the only card to play right now.

        • TechHog

          I don’t understand why ARPU being high is so important when gaining customers through value is the goal. If this is the way things are, then it’s the market that’s flawed, not T-Mobile’s strategy.

          You’re essentially saying that you’re pro-duopoly here.

  • Alex Pilaia

    Google Needs to buy Tmobile… like NOW.

    • mjfadaway

      No they don’t

    • kinery

      it’ll be a terrible idea

    • Kendrick Vargas

      I love google, but they’re in the habit of dropping or abandoning things they decide they don’t like or can’t be bothered to pay attention to.

    • Bigjavar101

      I agree!

    • NO WAY. I think that is very bad idea. I have been with T-mobile for a long time. I think Google would prevent any new Windows Phone. I am enjoying my Lumia 925

      • Makoute

        Why would they do that? That is kicking customers away!

        • The reason is from Past History.
          1) Google Not making Apps for Windows Phone. The rational was low market share granted that is true but follows up with next hit or even Windows. You are forced to use it on the Web, Chrome, Android, and iOS.
          2) Youtube App Scandal – since Google does not make apps for WP then Microsoft did it. Granted the first app kind of skipped ads but MS fixed it so it could. Google was not Happy and claim the app is not “html5” api. Which MS said this was temporary until WP 8.1 and also Google does not have html5 apps for iOS or Android. In the end, google revoke the Youtube api to MS.
          Which does not make sense because Google is in the business of making Money from ads but by Kicking customers away who use WP. Google personally made the Youtube app for Xbox One. Which is weird?
          3) Google Killing ActiveSync for regular users and other users. This prevents people who like the protocol to sync Mail and PIM info. I can grant it for Google trying to save money from paying MS the patent fee.
          4) Google not using html standards which prevents IE or WP to display Google sites correctly. The dominate share is webkit browser which is coded on websites.
          5) Google Services do not even try or even prevent the use of Google on MS side. While MS are able to be used on all platforms granted it could be due to market share.
          6) This is not google thing but T-Mobile already mostly Android and little support of WP so it is very likely T-Mobile would do the same thing like Blackberry and remove it if owned by Google and claim Market Share.

      • Josh Robert Nay

        Exactly. I love my Windows Phone too and seeing Google’s abysmal and childish attitude towards anything they can’t control, I’d rather stay FAR away from anything they do.

    • Adrayven

      Lord no…

    • Josh Robert Nay

      NO. I’d rather be an AT&T customer. Hell I’d rather be a Sprint customer.

  • DT_TakeDownTheForSaleSign

    I thought DT was in the cellular business, and should welcome owning the hottest alternative to ATT/Verizon in the US. All they need is 600 mghz spectrum, and the financial commitment to build out the network, form rural partnerships like Sprint is doing, and offer plans at a 20% discount to the overpriced scams that ATT/Verizon offer and T Mobile can win. It is a turn off and makes T Mobile US an unpredictable and therefore unreliable carrier to sign up with as long as this For Sale non sense continues. One thing I can say for Verizon I know they will be around for a long time. I have no idea what T Mobile will be like or what kind of company it will be in six months not to mention a few years from now.

    Note I am disappointed to see TMO’s plans inching up in price. I currently have an unlimited plan on VZ for $90/month. TMO’s new pricing has dampened my interest considerably in switching as much as I have grown to dislike Verizon’s sleaze and greed.

    I am currently traveling across the Southwest – Eastern Sierras, Nevada, Utah – presently in the Bryce Canyon area. I can live with some increased gaps in coverage, but Verizon is pretty solid especially when it comes to National Parks. I made a call twelve miles in from the trailhead on Zion’s West Rim Trail a surprising bit of coverage that is typical of Verizon. I am ready to jump, I want to jump, and would rather give my money to T Mobile, but I get much better value and reliability currently with my plan on Verizon.

    I wish a future Un Carrier offer would be for T Mobile to say bring your current contract over to T Mobile and we will match it. Up until the latest T Mobile plans I would have saved a some money switching, now the difference is negligible.

    • Fabian Cortez

      There are no contracts with T-Mobile so signing up isn’t much of an issue provided that you have your own device.

      And even if they were bought out, the network and/or plans will not change overnight.

      • sushimane

        I got the a contract the value plan. Unlimited everything for 65 dollars including tax…

    • Josh Robert Nay

      I live near Zion National Park and get pretty solid coverage with T-Mobile. Ironically I’m using a Nokia Lumia 822 from Verizon on T-Mobile’s network. :P

  • Eric

    I wish giant Telefonica would bid on Tmo

    • josephsinger

      Or VodaFone

      • Josh Robert Nay

        I’ve always loved the idea of Vodafone bidding, assuming of course they don’t put Legere on a leash.

        • Only if you like Verizon, formerly owned by Vodafone in part.

    • Better yet: América Móvil.

  • Anonymous

    Looks like no more french fries with Tmo.

    Tmo better pick up that ARPU before JL and that puppy dog mouth of his falls like the housing market. Only a matter of time before that bubble burst and Tmo gets sold on the cheap like Sprint.

    • TechHog

      Okay, who are you shilling for? AT&T?

  • Wilfredo Martinez

    Blah, all they want is to have the U.S wireless market dominated by 3 nationwide wireless companies. Highly doubtful that would happen given the fact that it is proven that 3 companies would not be in the public’s interest and 4 nationwide wireless companies is good for consumers.

  • dontsh00tmesanta

    Nah if someone is to buy tmobile it shouldnt be another carrier….

  • #BringBackAdvantageProgram

    This is a crushing blow! Can you buy out contracts and offer the Advantage Program?
    Get your $h!t together!