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.
Iliad has 5.7 million broadband subscribers and 8.6 million wireless subscribers. T-Mobile has 50.5 million subscribers on its wireless network.