Nobody saw this one coming. Just as Sprint is sweating it out in front of its hoped-for acquisition of insurgent U.S. cellular carrier T-Mobile, a French carrier called Free drops in with a $15 billion bid for T-Mobile.
Free is owned by the French conglomerate Iliad.
Iliad said it offered $15 billion in cash for 56.6 percent of T-Mobile US, or $33 a share. That’s considerably less than what others have offered for the company. Reports have said that T-Mobile and Sprint have been in serious talks for the past few months about a merger deal between the two carriers valued at more than $30 billion.
For Iliad, the T-Mobile offer represents a chance to jump into the U.S. cellular market, which is the richest market in the world. Iliad believes that deal has no anti-trust implications because it is a foreign carrier. (And that might carry some weight, given that T-Mobile’s origins are in Germany — its parent company is Deutsche Telekom.)
The man behind the Illiad (which operates under the Free brandname) is Xavier Niel, a dynamic French entrepreneur and businessman. Think of him as the Richard Branson of France, complete with long hair and an outspoken, rebellious attitude.
It may take some serious chutzpah and salesmanship to push this deal through, but Niel may have it.
“He always does thing very creatively, outside of normal business practice,” Scality CEO and Niel acquaintance Jerome Lecat told VentureBeat Thursday. “He will exploit any room for interpretation in regulations, and will always try to spend as little money as possible.”
As it stands, Niel and company are offering far less for T-Mobile than Sprint is prepared to pay.
“I don’t know what is his twist is on this deal, but I doubt he would have made an offer if he did not have a chance,” Lecat says.
T-Mobile is saying only that it received the Iliad offer, nothing else for now.
However, in a call with analysts after the company’s quarterly earnings announcement Thursday, T-Mobile’s CEO John Legere — another long-haired, outspoken executive — stressed that his company has several deal options, not just the one with Sprint.
T-Mobile is the fourth largest carrier in the U.S., just behind Sprint. By subscriber count, both Sprint and T-Mobile trail AT&T and Verizon by a wide margin. It is thought that a merger of the two would create a worthwhile competitor to the two market giants.
Who knows — there may be a budding bromance between Niel and Legere.
But there’s no doubt Legere also received a call from Sprint CEO Dan Hesse today to ask if they were still buddies.
T-Mobile had a market value of about $26 billion at the close of the markets Thursday. Sprint is valued at $30 billion. Sprint shares lost 5.3 percent of their value, falling to $7.35 with the news of Iliad’s offer today.