T-Mobile US Rejects Second Bid, Iliad Scraps Acquisition Plan
French telecom startup Iliad SA has dumped its plan to acquire T-Mobile US Inc. (TMUS), the fourth largest national telecom carrier in the U.S. Since 2011, Iliad is the third company after AT&T Inc. (T) and Sprint Corp. (S) to ultimately discard plans of taking over T-Mobile US.
In Aug 2014, Iliad had offered $15 billion ($33 per share) for a 56.6% stake in T-Mobile US. However, Deutsche Telekom, the parent company of the T-Mobile US, immediately rejected the offer on ground of inadequacy. Meanwhile, Iliad negotiated with several investment banks and private equity firms to help it to place a higher bid for T-Mobile U.S.
Recently, Iliad offered second bid of $36 per share for a 67% stake in T-Mobile US, which was again turned down by Deutsche Telekom and T-Mobile US’ board. Following this, Iliad has finally dropped its plan to acquire T-Mobile US.
T-Mobile US is an attractive takeover target amid the ongoing consolidation trend within the U.S. telecom industry. Since 2011, Deutsche Telekom has been exploring several options to divest its U.S. operations. AT&T placed the first bid of $39 billion for full control of T-Mobile U.S.
After a close scrutiny, the Federal Communications Commission (:FCC) thwarted AT&T’s attempt to acquire T-Mobile U.S., stating that it seeks a minimum four national carriers in order to maintain competitiveness.
In Jul 2014, Sprint offered $16 billion for a little over 50% stake in T-Mobile U.S. Again the deal was thoroughly evaluated by both the FCC and the U.S. Department of Justice. The regulators decided for the same opinion. Consequently Sprint opted out from the race.
Last month, Bloomberg reported that satellite TV operator DISH Network Corp. (DISH) has been negotiating with Deutsche Telekom for the acquisition of T-Mobile US.
DISH may seriously pursue the deal after the completion of the upcoming airwaves auction for advanced wireless access (AWS-3) scheduled to be conducted by the FCC on Nov 13. Notably, both DISH and T-Mobile US are bidding for AWS-3 spectrum.
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