Iliad offer for T-Mobile US not enough, Dish still in the frame

The quarterly earnings season has provided a timely boost to the T-Mobile US acquisition saga. Apparently scared off by US regulators, Sprint ended its long courtship of DT’s US operation earlier this week, just after France’s Iliad had put in a surprise bid of its own.

But exquisite timing alone seems to have been insufficient to impress TMUS parent Deutsche Telekom, according to comments from its CEO and Chairman Timotheus Höttges, during DT’s recent Q2 2014 earnings call.

Not even waiting for the inevitable analyst question, Höttges got straight to the point in his prepared remarks, according to the transcript on Seeking Alpha. “Current TMUS business momentum puts the company in a strong position from which to consider any future M&A opportunities or proposal, which obviously would have to add more value to TMUS shareholders than a stand-alone case,” he said. “At this point in time, we are not aware of any actionable proposal that offers such superior value.”

Companies have to be very cagey on these quarterly calls as a single word out of place can have a massive impact on share price and business in general. But in plain English Höttges is saying that there are no bids for TMUS currently on the table that are worth considering, which means Iliad will have to dig a bit deeper if it wants to be a US player. He also seemed to acknowledge the US regulator’s role in scuppering the Sprint acquisition and decided to have a bit of a moan.

“The political and regulatory environment in the U.S. has to be open to considering further consolidation and to looking at the overall market evolution, not just on an isolated mobile market definition,” said Höttges. “If U.S. politics and regulation are of the opinion that the 4-player market in the U.S. is necessary, then they will have to take care of the ability of the smaller players to fulfill their role as a maverick and to be able to compete successfully. This applies, amongst others, to the auction design for the 600 megahertz spectrum auction, which is coming in 2015, as an example.”

In related Q2 earnings call news Chairman of Dish Network, Charlie Ergen, left the door open for his company to be a player in the TMUS saga with the following answer to an analyst question: “Obviously, on the more M&A side, a lot has happened in the last 24 hours, and we really haven’t had a chance to sit down and discuss that internally, but we remain interested in working to enhance our overall business, and that could include looking at the number of companies out there,” he said. “Obviously, the AT&T-DIRECTV deal have probably lessened some optionality that we had. The Sprint announcement last night probably increased some optionality we have.”

Assuming “optionality” is an equivalent word to “options”, Ergen is at the very least not ruling a move out.

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