Paris -- French startup carrier Iliad said it is dropping plans to buy T-Mobile, contending that T-Mobile and majority shareholder Deutsche Telekom “have refused to entertain its new offer.”
The company’s original offer was made in late July to purchase a 56.6 percent stake in the company. Illiad said it offered to buy stock at a “significant premium.” Then the company created a consortium with two private-equity funds and international banks to “significantly” improve the terms and acquire 67 percent of T-Mobile at about $36 per share.
Illiad said it wanted “to accelerate T-Mobile US's transformation, notably by saving more than $2 billion of cost annually,” and create “significant value for both Iliad's and T-Mobile US's shareholders.
Illiad is dropping its bid after Sprint owner SoftBank dropped its pursuit of T-Mobile following opposition by federal regulators.
A purchase by Illiad could have cause U.S. service pricing to tumble, leaving Sprint the least able to compete among the national carriers, Strategy Analytics had concluded. In a report, the research and consulting company said Iliad drove down French service revenues by 29 percent and led to a 19 percent decline in carrier EBITDA since its launch.
Iliad founder Xavier Niel is also an investor in Israel's Golan Telecom, and its “aggressive mobile launch two years' ago has had an equally dramatic impact on the market,” Strategy Analytics added.