Iliad Drops T-Mobile Buyout Plans After Offers Spurned

Iliad's attempt to buy T-Mobile is now over after the French telecom company said its latest offers for T-Mobile have been rejected.

After months of pursuing a deal to acquire T-Mobile US to bolster its global aspirations, French telecommunications company Iliad has announced that it has ended its acquisition attempts for good.

"The Iliad Group announces that it puts an end to its project of acquiring T-Mobile US, following exchanges with Deutsche Telekom and selected board members of T-Mobile US who have refused to entertain its new offer," Iliad said in a terse Oct. 13 statement. Deutsche Telekom owns a large chunk of T-Mobile US.

Iliad had made an offer to purchase a 56.6 percent stake in T-Mobile at the end of July for some $15 billion as it sought to enter the U.S. cellular marketplace, but that offer "was rejected by the T-Mobile US board despite the significant premium offered," according to Iliad.

That still didn't stop Iliad, which then assembled another offer following the original rejection, according to the company. "Following this offer rejection, 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's capital to be acquired from 56.6 percent to 67 percent," Iliad stated. That improved offer totaled about $36 per share. "This transaction would have created significant value for both Iliad's and T-Mobile US' shareholders."

The July Iliad offer for T-Mobile came even as merger rumors had been swirling around Sprint and T-Mobile. Iliad refused to comment at that time about its own rumored acquisition attempt.

Iliad isn't the first company to recently drop its acquisition attempts for T-Mobile.

In early August, Sprint dropped its own plans to buy T-Mobile after the move was opposed by regulators, according to reports. Sprint had been rumored for months to be seeking a merger with T-Mobile so that the two struggling companies could join together and fight harder to compete with mobile powers Verizon Wireless and AT&T. Neither company ever commented on those rumors until Sprint finally said in August that it was giving up its plans.

Following the aborted merger attempt, Sprint then shook up its executive ranks by replacing its CEO, Dan Hesse, with Marcelo Claure, the founder and CEO of Brightstar, a subsidiary of Softbank, which is also Sprint's parent company.

All of the acquisition rumors apparently did little to slow down new product offerings at T-Mobile in recent months.

In September, T-Mobile unveiled big plans to give customers the ability to make mobile calls using WiFi in their homes and using networks almost anywhere around the world, while also getting free texting, messaging and voice mail services on domestic airline flights that are served by Gogo.

T-Mobile's new WiFi services allow customers to install and use free routers made by Asus to resolve dead-spot cellular problems that many users experience in their homes. The new system essentially will turn every single WiFi connection into a T-Mobile cellular tower, including in the homes of customers.

To make it all work, users will have to get new mobile devices that have the new capabilities built in, as well as the new routers that the company will provide for free. All of T-Mobile's new devices will be enabled for this new service out-of-the-box.

The new in-flight WiFi capabilities for customers mean that users will get unlimited free texting, messaging and voice mail services on any domestic flight served by Gogo.

In the aftermath of the failed Sprint merger, T-Mobile went on the offensive to seek new customers, which it primarily hoped to poach from its biggest rivals: Sprint, AT&T and Verizon Wireless.

Also in August, T-Mobile US claimed rights to the top spot in the growing prepaid wireless marketplace in the United States. T-Mobile US said in an announcement that it now has 15.64 million prepaid wireless customers, compared with 15.19 million such customers for rival Sprint. AT&T has 11.34 million prepaid customers, while Verizon Wireless reports 6.04 million prepaid customers, according to T-Mobile.