DT reportedly likes Sprint's bid better than Iliad's


Sources tell Bloomberg T-Mobile USA (TMUS +6.7%) parent Deutsche Telekom (OTCQX:DTEGY) views Iliad's (OTC:ILIAF) $33/share offer for a 56.6% stake in T-Mobile as less competitive than Sprint's (S -5.9%) bid, previously reported to be around $40/share.

Though Iliad declares its bid values the T-Mobile shares it won't own at $40.50, that figure includes $10B worth of synergies the French carrier predicts a merger will yield. Sprint and SoftBank (OTCPK:SFTBF), of course, predict their offer would also yield major synergies.

"Iliad is about a third of the size of T-Mobile US, and we don't think there would be synergies from the deal," says analyst Jonathan Chaplin. He adds a deal will be tough to finance without Iliad founder/majority shareholder Xavier Neil surrendering control.

Nonetheless, T-Mobile has rallied to $33 on news of Iliad's bid, which is bound to face less FCC/DOJ scrutiny if accepted and successfully financed.

The offer is overshadowing a solid Q2 report from T-Mobile. The carrier saw 1.5M net customer adds in Q2 (up from 1.3M in Q1), slightly more than Verizon's Q2 adds and well above AT&T and Sprint's. Branded postpaid net adds totaled 908K (579K phone adds), and branded prepaid net adds 102K. Service revenue rose 7.1% Y/Y.

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Comments (3)
  • JeffreyLangBoyd
    , contributor
    Comments (662) | Send Message
     
    Think that is pretty obvious.

     

    Also pretty obvious that regulators would prefer Iliad deal if T-Mobile is definitely in play unless Softbank is offering to put some extremely consumer friendly commitments into place as part of the deal.
    31 Jul 2014, 05:06 PM Reply Like
  • MSF INVESTMENTS
    , contributor
    Comments (5463) | Send Message
     
    Jeff I agree with you.

     

    The friendly commitments will be M Son's other holdings.............

     

    Lahiem
    31 Jul 2014, 06:58 PM Reply Like
  • Spinner
    , contributor
    Comments (10) | Send Message
     
    Softbank will come in higher than the $40 reported. Son has to wait for the success of his Alibaba IPO in Sept to prove/secure his funding with the banks. Additionally, TMUS has Carlos Slim in waiting should S.B. not get approved. TMUS will happen over $40 with someone. Just hold on... Sept/Oct
    31 Jul 2014, 11:21 PM Reply Like
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