Boston, MA 08/14/2014 (wallstreetpr) – T-Mobile US Inc (NYSE:TMUS), the No. 4 carrier in the U.S. whose shares are down almost 14% this year, recently received an unsolicited buyout offer from French wireless firm Iliad SA. The offer came just when doubts started to grow concerning regulatory challenges to a merger between T-Mobile and U.S. No. 3 Sprint Corporation (NYSE:S).
Inadequate Offer
However, according to T-Mobile’s chief financial officer, Braxton Carter, the takeover proposal from Iliad is “inadequate,” but they can still discuss a deal with the French telecom if they boosted their bid. Iliad placed on the table $15 billion to acquire a controlling stake in T-Mobile US Inc (NYSE:TMUS) at 57%. They cited interest in the U.S. telecom industry but analysts believed they were also playing into the regulatory hurdle for T-Mobile and Sprint to merge. Sprint offered about $32 billion to add T-Mobile to its portfolio so that it can increase competition against front runners Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T).
Speaking at an investor conference, Carter said that although Iliad’s offer was flattering, it fails to take into account T-Mobile’s prospects. However, he said people rarely step forward with their best bids to start negations, which means they are ready to discuss with Iliad if a better offer comes on the table.
Shareholder Value
Similar sentiments were last week echoed by Timotheus Hottges, CEO of Deutsche Telekom, which owns 67% of T-Mobile US Inc (NYSE:TMUS). He said they were open to buyout talks at the right price. However, he said there was no such offer on the table yet as. Their objective is to increase shareholder value, which means that a good proposal for T-Mobile is that which offers greater value to the investors than what they can create organically.
It remains to be seen if Iliad would increase their takeover bid for T-Mobile US Inc (NYSE:TMUS). However, Wall Street Journal reported in an article that Iliad didn’t see the need to boost their bid, especially after Sprint abandoned T-Mobile.
Shares of T-Mobile declined 1.59% in the regular hours but gained 0.03% in the post-market session.
