T-Mobile US Inc. has another suitor. Upstart French telecom company Iliad on Thursday said it has offered $15 billion for a majority stake in the fourth-largest U.S. cellphone company.
Iliad is injecting itself into the courtship of T-Mobile by Sprint Corp., the No. 3 U.S. cellphone carrier. Sprint has reportedly been in talks with T-Mobile for months, but no deal has been announced. Analysts say U.S. regulators are likely to block the T-Mobile-Sprint pairing because of concerns that it would reduce competition and thus raise prices for consumers.
Iliad is much smaller than T-Mobile and doesn't have the financial might to buy the whole company. It's offering $15 billion in cash for 57% of T-Mobile at $33 a share. T-Mobile didn't immediately comment on the report. Iliad said it did not have a response from T-Mobile's board.
T-Mobile shares jumped $2, or 6.5%, to $32.94 after Iliad's announcement, indicating that investors believe there's some chance of an improved offer, either from Iliad or Sprint. Sprint shares fell 41 cents, or 5.3%, to $7.35.
T-Mobile is controlled by Deutsche Telekom of Germany, which owns 67% of the stock. A similar portion of Sprint's stock is owned by Softbank Corp. of Japan.
Iliad noted that its offer would not raise the same antitrust concerns that come with a Sprint deal, and that Iliad and T-Mobile US are both industry mavericks.
Under Chief Executive John Legere, T-Mobile has thrown out the standard two-year service contract and introduced new plans that enable customers to upgrade their phones more frequently, a move quickly copied by the larger carriers.
Iliad broke onto the French scene with the Freebox, a unit that combines Internet access, TV and phone service over broadband lines. In 2012, it started offering cellphone service as well.