It is the second time that a potential acquirer has deserted its pursuit of T-Mobile US Inc (NYSE:TMUS), as Iliad SA (EPA:ILD) withdraws its offer to acquire the telephone maker. This is the second company after Sprint Corporation (NYSE:S) to abandon its acquisition of the fourth-largest mobile carrier in the U.S.
Earlier, Deutsche Telekom AG (ADR) (OTCMKTS:DTEGY), owner of T-Mobile, rejected both the bids from the French Telecom, which improved its bid to nearly $36 per share, considering them lower for the carrier. Iliad SA (EPA:ILD) said in its press release that the company is to abandon the pursuit of the American telecom carrier after the board members of T-Mobile US Inc (NYSE:TMUS) and the parent company has refused its new offer.
The French company gave a hint of its potential partners stating ‘Iliad put in place a consortium with two leading private equity funds and Tier-1 international banks allowing it to improve significantly the terms of its offer by enhancing the cash amount and increasing the share of T-Mobile US’ capital to be acquired from 56.6% to 67%. This new offer, at about USD 36 per share (cash + share of value creation), would have fitted into Iliad Group’s strict financial policy in terms of indebtedness and dilution.’
Iliad SA (EPA:ILD) further added that it could have added to the profits of the fourth largest U.S. carrier by saving up to $2 billion in its operating costs and the same could have generated more value for the shareholders of both the companies.
The shares of T-Mobile US Inc (NYSE:TMUS) fell nearly 2.50% to close at $26.92 after the announcement from the French company. Earlier, Sprint Corporation (NYSE:S) abandoned the acquisition of T-Mobile after sensing potential issues with the US regulators. Iliad SA (EPA:ILD) stepped up in July 2014 with its first bid for the U.S. mobile carrier.
This article has been written by Prakash Pandey.