A surprise bid for a majority stake in T-Mobile has been put forward by French mobile carrier Iliad.
The offer, which amounts to $15 billion, comes as T-Mobile and Sprint discuss the possibility of a $32 billion merger.
Iliad said that it would finance its $15 billion bid through a combination of debt and equity. The funds would be partitioned as such: $12.3 billion through debt and $2.7 billion through equity. The company's offer comes to about $33 per share. It valued the remaining shares at $40.5 based on what it claims to be $10 billion in cost savings. Iliad pegged T-Mobile's overall value at $36.2 per share. The figure represents a 42 percent premium from T-Mobile's unaffected share price of $25.4 billion.
Reports said [subscription required] that Iliad made the offer to T-Mobile last week, in an attempt to acquire a 56.6 percent stake in the fourth largest cellphone carrier in the United States. According to its report, it is still unclear what response the bid has generated within the company. However, a source reported that Deutsche Telekom AG, the parent company of T-Mobile, has already declined Illiad's offer.
Iliad, the fourth largest mobile operator in France, confirmed its offer after the reports came out. The company was founded by Xavier Niel, a French businessman who also owns the Le Monde newspaper and Monaco Telecom.
"Following press speculation, Iliad confirms it interests in T-Mobile... T-Mobile US has successfully established a disruptive position, which in many ways, is similar to the one Iliad has built in France. Iliad has submitted to the Board of Directors of T-Mobile US an indicative offer for T-Mobile US. The offer has the full support of Mr. Xavier Niel (founder and majority shareholder of Iliad) and was unanimously approved by Iliad's Board of Directors," the company said [pdf] in a press release.
In spite of Deutsche Telekom's refusal, there are still many complications stalling a merger between Sprint and T-Mobile, which leaves an opening for potential bidders. The biggest factor keeping Sprint and T-Mobile from making a deal is the difficulty of gaining regulatory approval. If the two companies merge, the number of competitors in the US mobile market would be reduced, something that would not sit well with regulators.
