The French telecommunications company, Iliad, has made an unexpected offer for T-Mobile, which could set up a bidding war between them and T-Mobile’s other potential suitor, Sprint.
Iliad has shaken up the French mobile and broadband market in the last ten years or so with its affordable subscriber plans, and according to its $15 billion bid for 56.6% of T-Mobile, the company is looking to do the same in the United States as well.
The bid comes at $33-per-share, but Iliad said it valued the rest of T-Mobile at $40.50-per-share, and expects $10 billion of cost savings from the deal. Deutsche Telekom currently owns 66.67% of T-Mobile.
Iliad’s founder, Xavier Niel, has been trying to build a telecommunications empire – having already set up businesses in France, Israel, and Monaco – and this move is just the latest in his bold plan. He actual bears many similarities to Masayoshi Son, the head of Softbank, which controls Sprint and is the other company looking to take control of T-Mobile.
Iliad may actually have a better shot at buying T-Mobile than Sprint does as it would not have to face the same anti-trust scrutiny that is hindering Sprint’s deal, which would merge the third and fourth-largest mobile network operators in the United States. The FCC and the DOJ have previously expressed a desire to have at least two more network operators competing against the current market leaders, AT&T and Verizon.
Niel believes the United States market is ripe for the kind of challenge that Iliad previously mounted in France, whose entrance into the market in 2012 sent prices tumbling down by 30% and damaged profits for its much larger rivals, Orange and SFR. With a market capitalization of just above $16 billion, this deal would be a big bite for Iliad.
Read more about the story at The Wall Street Journal.