France's Iliad Launches Surprise Takeover Bid for T-Mobile USA
Published on: 1st Aug 2014
France's smallest mobile network operator, Iliad has launched a USD15 billion offer to buy a majority stake in T Mobile USA. The move, which was largely unexpected seeks to trump the long rumoured merger between T Mobile and Sprint.
Iliad has offered $15 billion in cash for 56.6% of T-Mobile USA, at $33 per share. Iliad values the remaining 43.4% of T-Mobile US at $40.5 per share on the basis of $10 billion of synergies to the benefit of the T-Mobile USA shareholders.
The cash portion would be financed via a combination of debt and equity. Iliad says that it has the support of leading international banks for the acquisition debt.
T-Mobile US had a market value of $24.8 billion before rumours of a takeover bid started to emerge a few hours before the Iliad statement.
The offer has the full support of Mr Xavier Niel (founder and majority shareholder of Iliad) and was unanimously approved by Iliad's Board of Directors. However, the reaction of the T-Mobile management is currently unknown.
There is also a difficulty in that foreign buyers of US mobile networks need additional levels of regulatory clearance and that Deutsche Telekom is currently only allowed to sell its entire stake as a lump sum to any new owner.