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Iliad abandons T-Mobile US chase after second rejection

Iliad has ceased its pursuit of T-Mobile US after its second bid to acquire the business was rejected by owner Deutsche Telekom and some TMUS board members. This marks the end of a four-month project for Iliad trying to enter the US market.

The French telco first made an offer to purchase a 56.6% stake in TMUS in July, but the offer bounced straight back “despite the significant premium offered,” as Iliad put it.

Following the rejection, Iliad formed a consortium of investors to enhance the next offer laid on the table, through which it would have gained a 67% stake in TMUS for approximately $36 per share and $15 billion in total.

“Iliad had the ambition to accelerate T-Mobile US’ transformation, notably by saving more than USD 2 billion of cost annually,” Iliad said in a statement. “This transaction would have created significant value for both Iliad’s and T-Mobile US’ shareholders. The Iliad Group will continue its profitable growth policy as it has been conducted over the last 15 years in the interest of its subscribers, employees and shareholders.”

Although Deutsche Telekom has confidently rejected not one but two purchase offers for TMUS from Iliad, the situation is hardly ideal for the German telco’s US subsidiary. TMUS is the fouth-largest player in the US market, and it has been expected for some time it will join forces with another player. It came close to a merger with Sprint but the deal crumbled under reported regulatory opposition pressure.

Reportedly TMUS has defended its ability to stand alone, while also saying it remains open to partnerships with pay-TV players and overseas investment.  However, faced with competition from the likes of AT&T and Verizon Wireless that have a lot more resources to acquire spectrum for example, the company is vulnerable and probably needs to come up with some reinforcement on its side sooner rather than later.


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