Iliad makes shock bid for T-Mobile US

01 August 2014 | Kavit Majithia


French operator Iliad has emerged as a surprise bidder for T-Mobile US, which could instigate a bidding war with US carrier Sprint.

Iliad has offered $15 billion in cash for a 56.6% stake in T-Mobile US – valuing the entire company at $29.5 billion – it said in a statement, and will attempt to gain entry into the US market to compete with larger players AT&T and Verizon.

The company, which has rocked the French market after launching Free Mobile, a cheaper mobile alternative, has now presented a case to rival SoftBank-owned Sprint’s offer to acquire the company.

According to Reuters, T-Mobile was valued by Sprint at approximately $32 billion, and Iliad’s offer is significantly less than Sprint’s initial offer, which equated to $40 a share.

Xavier Niel, Iliad’s founder, believes that his lower bid could be successful as it will not receive the same anti-trust scrutiny from regulators that Sprint will face in its attempts to merge the third and fourth-largest players in the country.

Iliad will have been buoyed by the FCC’s earlier comments that it wants to have at least two operators competing with AT&T and Verizon.

Analysts believe Iliad’s bid is a long shot, particularly because it lacks experience in offering mobile services internationally and also because of the demands that would face the company in operating in the US.

Iliad will reportedly finance the deal through a mixture of equity and debt, with the backing of international banks.