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CNBC: T-Mobile receives $15 billion bid for 56.6% of the company from French telecom Iliad

Posted: , by Alan F.

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CNBC: T-Mobile receives $15 billion bid for 56.6% of the company from French telecom Iliad
Shares of T-Mobile and Sprint were halted briefly on Thursday, amid speculation that Sprint was announcing its long-awaited bid for its rival. Instead, a surprise bid was made by French telecommunications giant Iliad. The company offered to buy 56.6% of T-Mobile for $15 billion. That works out to $33 a share. Iliad values the remaining 43.4% of T-Mobile at $40.50 due to the $10 billion of synergies it says that T-Mobile will receive.

Sprint reportedly has agreed with T-Mobile on a transaction that would value the entire company at $32 billion. That deal would come with a $2 billion break-up fee, and would require $45 billion in financing. Most importantly, it would keep John Legere as CEO of the upstart carrier.

Earlier today, surging T-Mobile announced that it had another quarter of strong growth, with over 1 million new customers added to the carrier's subscriber list. Right now, the mobile operator's shares are trading at 32.75, up 5.9% on the day.

"The US mobile market is large and attractive. T-Mobile US has successfully established a disruptive position, which in many ways, is similar to the one Iliad has built in France."-Iliad statement

German telecom Deutsche Telekom owns a majority of T-Mobile's shares and would have to be involved in the transaction. U.S. Regulators have been wary of a Sprint purchase of T-Mobile, since it would reduce the number of competitors to the Verizon-AT&T duopoly. The bid by Iliad could force Sprint's hand, moving up the timing on any potential acquisition of T-Mobile.

source: CNBC

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posted on 31 Jul 2014, 12:11

1. johnbftl (Posts: 222; Member since: 09 Jun 2012)


Umm, doesn't Deutsche Telecom own 67% right now? So where would that owner 10% go? DT wants out completely.

posted on 31 Jul 2014, 14:06

11. DocOc (Posts: 138; Member since: 23 Apr 2014)


They do not want completely out. Even in the Sprint deal, DT still holds a percentage of TMO.

posted on 31 Jul 2014, 12:17

2. BobbyDigital (Posts: 592; Member since: 29 May 2014)


DT might be content with being a minority owner.

posted on 31 Jul 2014, 13:31 1

8. zinger69 (Posts: 47; Member since: 13 Feb 2014)


I read that DT would still have a small stake in T-Mo if the Sprint merger goes through.

posted on 31 Jul 2014, 12:18 2

3. Alan01 (Posts: 201; Member since: 21 Mar 2012)


In theory, it could dump them on the market. The shares will continue to trade. Iliad has valued the remaining shares at $40.50.

Alan F.

posted on 31 Jul 2014, 12:57

6. Droid_X_Doug (Posts: 5926; Member since: 22 Dec 2010)


Why only 'in theory'? For that matter, what stops DT from selling its position over a period of time if it chose to?

posted on 31 Jul 2014, 12:27 2

4. Damo579 (Posts: 211; Member since: 18 May 2013)


I would like them to buy T-Mobile rather than Sprint.

posted on 31 Jul 2014, 13:32

9. zinger69 (Posts: 47; Member since: 13 Feb 2014)


Why? And it's Softbank buying them, not Sprint.

posted on 31 Jul 2014, 16:20 1

16. Bernoulli (Posts: 1506; Member since: 01 Sep 2012)


Because maybe Lliad will focus more on spectrum auctions and actually improving coverage, whereas softbank will only focus on getting customers no matter what, thus not focusing much on getting network enhancements

posted on 31 Jul 2014, 17:50

18. lsutigers (Posts: 762; Member since: 08 Mar 2009)


If you have been following the TMO, Sprint, Softbank deal you would know that part of the plan is to build a bigger, faster network than ATT / Verizon.

posted on 31 Jul 2014, 12:50 2

5. joe1blue (Posts: 119; Member since: 25 Jul 2013)


This is good good news for me considering I just left Sprint being with them for 7 years T-Mobile is great here in south Florida sadly I can't say the same for Sprint.

posted on 31 Jul 2014, 17:52

20. lsutigers (Posts: 762; Member since: 08 Mar 2009)


Sprint kicks ass in south Florida, particularly if you have a triband (Spark) phone, althought not required as service is still very good.

posted on 31 Jul 2014, 13:13 2

7. Hammerfest (Posts: 370; Member since: 12 May 2012)


I cant stand Sprint, I left them after 6 years because of the "Premium Data" bullsh*t when I had to use an Airave both at Home and at Work (for the first 5 years no other carrier had data in my area's either, AT&T changed that, not that I care for AT&T either)

SOOO My whole rant is on the unhappy, but IF its to happen, the most important part is: "Most importantly, it would keep John Legere as CEO of the upstart carrier."

posted on 31 Jul 2014, 13:47 2

10. Salazzi (Posts: 192; Member since: 17 Feb 2014)


You guys need to look into Iliad's background. This is a phenomenal thing!!

Iliad got it mobile license in 2009 and has since then been disrupting the french market. It offers triple play (kind of like our cable companies do), it offered it's customers simple bills to understand (such as the absence of unnoticed rates and addons that unexpectedly raise mobile fees)
"For instance, all subscriptions proposed by Iliad-Free Mobile will have a Mobile Data Plan included (28 Mbps max), most of them will be unlimited, and an attractive pricing will be proposed for prepaid services allowing occasional mobile data access at low cost. Iliad-Free will introduce an entry level subscription under €20 ($30) per month with unlimited data plan and 180 minutes of talk; and a competitive price (not disclosed) for 3G USB keys and a prepaid plan for 3G USB key."
Also they have been promoting the non-subsidization of mobile phones and the use of wi-fi in synchronicity with cellular. They also have roaming agreements where you get free data and texting abroad.

Doesn't this remind you ladies and gents, of a US carrier *cough cough T-Mobile cough*? I think it's awesome what they've done and continue to do in France, and Iliad's spirit is synchronized with T-Mobiles. So if they can bring in the capital to continue to do what they've both been doing in the same spirit, more power to them! And if they reinvigorate T-Mobile into something different.. something more, such as triple play like they offer in france, I think that's even better.

PS the above quote is from an article from December 2009, 28Mbps was pretty damn fast back then, definitely ahead of US. Essentially they can only better what we currently have with T-Mobile.

posted on 31 Jul 2014, 14:36

12. stuyjcp (Posts: 27; Member since: 29 Apr 2012)


Most of what you said is correct. I say most because it's much harder to blanket the US with faster speeds than France (regarding your PS). Otherwise, this seems like the French equivalent of T-Mobile.

posted on 31 Jul 2014, 15:43

14. Salazzi (Posts: 192; Member since: 17 Feb 2014)


It actually isn't as difficult as we are made to believe. It a fallacious argument propagated by the git telecom corps in order to not have actually improve their service for a change. The US is 3.71 million square miles. Verizon wireless earned 11.5 billion in profits in 2013, AT&T earned 18.5 Billion, Sprint lost 1.86 Billion, T-Mobile earned 35 million.
28.175 Billion / 3.71 million sq miles= $7,594/ sq mile. To place 1 mile of fiber it costs $800-2500 (depending on the quality of the wire and the speed that will be traveling through it. Essentially that's wiring the whole country up to have a tower or antenna every mile, which is absolute coating the nation in network and speed, especially how many towers can reach ranges of several miles. Let that just be food for thought. It isn't impossible. The above plan would leave plenty of capital left over for them as it would only cost 1/3 of the yearly income.

posted on 31 Jul 2014, 15:57

15. InfDaMarvel (Posts: 13; Member since: 20 Oct 2010)


You need to think that out a little. Range is not the only factor when it comes to networks.

posted on 31 Jul 2014, 16:26

17. Salazzi (Posts: 192; Member since: 17 Feb 2014)


I know. I was implying that if it was, it's possible to spread it nationwide. Regardless of which way we look at it from, it can be done. Not like they need to reinstall the entire cellular network every year.

posted on 31 Jul 2014, 14:37 2

13. Augustine (Posts: 777; Member since: 28 Sep 2013)


This would perhaps be a merger that both the FTC and the FCC would approve briskly.

posted on 31 Jul 2014, 17:52

19. JayFiveAlive (Posts: 42; Member since: 30 May 2014)


Given that Sprint had it's most profitable quarter in 7 years, this seems much better of a deal for the US market. Keep all 4 carriers going!

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