French telecom startup Iliad said Monday that it would abandon its pursuit of No.4 U.S. wireless carrier T-Mobile a move that fueled speculation that Dish Network could restart efforts to acquire the company.
In a statement Monday, Iliad said it has given up pursuit of the company after its parent, German telecom giant Deutsch Telekom, rejected its latest offer.
Iliad made its first offer for T-Mobile, the fourth largest wireless carrier in the U.S. behind Verizon Wireless, AT&T Wireless and Sprint in July, That offer, estimated to be worth about $15 billion ($33 per share) for a 56% interest in the company, was rejected as too low. Iliad said it increased its offer to $36 per share for a 67% stake in T-Mobile, but was again rebuffed by DT. Iliad said it had assembled a team of private equity and for the
Sprint, now majority owned by Japanese wireless company SoftBank, had entertained a possible merger with T-Mobile, which would have created a solid competitor to Verizon and AT&T, but it too scrapped those plans after determining it wouldn’t pass regulatory muster. AT&T, which is now in the midst of a multi-billion dollar merger with DirecTV, had agreed to purchase T-Mobile for $39 billion in 2011, only to have that deal rejected by regulators.
Dish had reportedly held talks T-Mobile in September, shortly after Iliad’s first offer for the company was rejected.
After Sprint abandoned its plans for T-Mobile in September, Dish chairman Charlie Ergen said that move increased Dish’s options regarding the carrier, but wouldn’t say whether he would make a bid.
Dish has been amassing its own wireless spectrum for years – it has licenses worth an estimated $17 billion – which it has said it would use to build out its own high-speed Internet offering. But Dish has said repeatedly that it would not build the network without a partner.
A Dish/T-Mobile combination also would seem to be more palatable to regulators because it would not reduce competition.
Pivotal Research Group principal and senior media & communications analyst Jeff Wlodarczak said while Dish is the most logical suitor for T-Mobile, he doesn’t see any rush to make a move before the AWS spectrum auctions slated for November.
Dish spokesman Bob Toevs declined to comment.
Dish shares closed at $59.61 each on Oct. 13, down $2.02 per share or 3.3%. T-Mobile shares finished the day at $26.88 per share, down 73 cents each or 2.6%.