Deutsche Telekom Can Sell T-Mobile Before Share Lock-Up Ends
Deutsche Telekom AG (DTE), the German phone company that completed a deal this month to enlarge its U.S. business, said it has the option to sell the asset to a buyer before an 18-month share lock-up period expires.
The company wouldn’t be restricted from selling if a third party made an offer for T-Mobile US Inc. (TMUS), Chief Financial Officer Timotheus Hoettges told shareholders at the annual meeting in Cologne, Germany, today. He was responding to an investor who named Vodafone Group Plc (VOD) as a hypothetical buyer.
In its agreement to merge the fourth-largest U.S. wireless carrier with MetroPCS Communications Inc., Deutsche Telekom pledged not to sell shares of the listed carrier on the stock market for 18 months. The German company holds a 74 percent stake in the company, which has a market value of $14.2 billion.
“There is an exception clause in the contract regarding the lock-up,” said Hoettges, who will take over as Deutsche Telekom’s chief executive officer next year. “We are in a position to sell all shares in one go.”
T-Mobile US rose for a sixth day, adding 2.2 percent to $19.68 as of 11:01 a.m. in New York. Deutsche Telekom added 3.1 percent to 10.08 euros on the Frankfurt exchange.
The clarification comes as the pace of transactions in the U.S. wireless market picks up. Dish Network Corp. (DISH) offered $25.5 billion last month to buy Sprint Nextel Corp. (S), topping a $20.1 billion bid from Japan’s Softbank Corp. (9984) Verizon Communications Inc. (VZ) wants to buy out Vodafone’s 45 percent stake in Verizon Wireless, the top U.S. wireless operator.
Verizon has told analysts that it believes the fair value of Vodafone’s stake is about $100 billion, people familiar with the matter said last month. Talks between executives of both companies over a deal have never amounted to much, in part because Vodafone doesn’t see the $100 billion offer as a reasonable opening bid, the people said.
Hoettges also said Deutsche Telekom is looking for a “partner” for its T-Systems corporate-client business in France, adding that he is “confident” to reach a solution before the end of the year.
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