Rumor Mill: Iliad working with Dish, Cox, Charter and others to improve T-Mobile bid

According to published reports, T-Mobile US (NYSE:TMUS) and parent Deutsche Telekom are poised to reject Iliad's $15 billion bid for 56.6 percent of T-Mobile because it's too small. However, a Reuters report said Iliad is working with Dish Network, Cox Communications, Charter Communications and others to improve its offer for the "uncarrier."

According to the Wall Street Journal, Iliad is seeking access to T-Mobile's confidential financial information in order to make a formal offer for the company. But unnamed sources cited by WSJ said that T-Mobile plans to reject Iliad's request for the confidential information. Iliad's bid, according to the sources, is "dead on arrival."

However, shortly after reports circulated about T-Mobile's impending rejection, Reuters reported that Iliad is working with investors to raise its offer. Citing three unnamed sources familiar with the matter, Reuters said the French company is in talks with Dish, Cox and Charter as well as infrastructure and pension funds such as Ontario Teachers Pension Plan (OTPP) and sovereign wealth funds including Singapore's GIC.

The companies declined to comment, according to the reports.

The addition of Dish, Cox and Charter into the mix adds another level of complexity to an already complicated situation. Dish Chairman Charlie Ergen has made no secret of his desire to get into the wireless business; Ergen conducted a brief bidding war with SoftBank CEO Masayoshi Son over control of Sprint (NYSE: S) last year before Son eventually won control of Sprint with a larger bid. Ergen subsequently said that he would be interested in T-Mobile if Sprint is unable to merge with the company.

Ergen's presence in the negotiations is bolstered by the significant spectrum holdings owned by Dish.

It's no surprise that T-Mobile is reportedly planning to reject Iliad's request for a peek into T-Mobile's books. Earlier this week, Bloomberg said that DT did not consider Iliad's $33-a-share offer competitive and thought it was inferior to a separate bid planned by Sprint (NYSE: S) parent SoftBank. SoftBank CEO Masayoshi Son is reportedly working on an offer of about $40 a share for T-Mobile, which would value the deal at about $32 billion.

If Iliad is able to increase its bid for T-Mobile, the stage could be set for a bidding war over T-Mobile between Iliad and its partners and Sprint and its parent SoftBank. At stake is a position in the hotly contested U.S. wireless market and control of T-Mobile, which has enjoyed notable success in recent quarters under the direction of CEO John Legere.

For more:
- see this Reuters article
- see this WSJ article (sub. req.)
- see this Bloomberg article

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