|Bid||17.76 x 0|
|Ask||18.03 x 0|
|Day's range||17.79 - 17.98|
|52-week range||4.25 - 17.98|
|Beta (5Y monthly)||N/A|
|PE ratio (TTM)||N/A|
|Forward dividend & yield||N/A (N/A)|
|1y target est||N/A|
(Bloomberg) -- Deutsche Telekom AG is in talks about a potential offer for SoftBank Group Corp.’s 8.5% stake in T-Mobile US Inc., a deal that would give the German telecom giant greater control over its U.S. affiliate.The terms of a potential deal, including whether Deutsche Telekom might bid for the entire stake to get majority control, haven’t been finalized and no firm decision has been made about an offer, according to people familiar with the matter, who asked not to be identified because the talks are private. Deutsche Telekom Chief Executive Officer Tim Hoettges may reveal plans to expand the company’s U.S. presence at a capital markets day this week, one of the people said.Representatives for Deutsche Telekom and SoftBank declined to comment.Hoettges has a unique opportunity to increase the carrier’s exposure to the U.S., which generates healthier returns than the rest of its footprint, for a below-market rate. In 2020, SoftBank raised $14.8 billion from selling T-Mobile US shares to institutional investors. The terms of the deal gave Deutsche Telekom the right to buy some of SoftBank’s remaining stake at a price based on T-Mobile US’s share price at the time, more than 20% cheaper than they are now.Read More: SoftBank Stake Sale Could Change T-Mobile’s Prospects: Alex WebbUnder the options’ terms, Deutsche Telekom can buy as many as 44.9 million shares at a price that’s roughly equivalent to where the shares were trading in June 2020, or just over $100, according to regulatory filings and statements from the companies at the time. Another 56.6 million shares are available at the 20-day volume-weighted average price leading up to the purchase. If Deutsche Telekom were to buy all 101.5 million shares at Wednesday’s prices, the deal would cost approximately $12 billion.Deutsche Telekom has until June 2024 to act on the options.The Japanese group became co-owner of T-Mobile US last year after the carrier completed a merger with Sprint Corp., which was controlled by SoftBank. SoftBank’s 8.5% holding in the merged company is valued at about $14.3 billion as of the shares’ last closing price. Deutsche Telekom currently owns 43% of T-Mobile US.“We endorse the Board of Management’s objective of continuing on a consistent growth course in the United States and Europe,” said Ulrich Lehner, chairman of Deutsche Telekom’s supervisory board, in a separate statement ahead of the company’s capital markets day on Thursday. “The Supervisory Board also explicitly supports the expanded U.S. strategy - following the successful turnaround and the merger with Sprint.”SoftBank has been raising capital over the past two years as part of a push to unload assets to finance stock buybacks and pay down debt. Masayoshi Son’s technology investment giant has enjoyed an upturn in fortunes over the past twelve months, with SoftBank’s Vision Fund investment arm driving recent profits after being the source of its biggest loss a year ago.(Updates with details on option pricing, comment from Deutsche Telekom’s board from fifth paragraph)More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Bidding in a 5G airwaves auction in the U.S. surged past $76.5 billion, fueled by a frenzied demand for capacity that could send carriers like Verizon Communications Inc. and AT&T Inc. to the debt market to finance the tab.The auction run by the Federal Communications Commission started last month with a field of 57 potential bidders, including the third major wireless carrier, T-Mobile US Inc., and pay-TV providers such as Dish Network Corp., Comcast Corp. and Charter Communications Inc. Within days, the tally exceeded analysts’ estimates of $47 billion.“It blows all auctions away,” said Sasha Javid, chief operating officer of wireless data company BitPath. The previous top FCC airwaves auction attracted almost $45 billion in bids in 2015. The current sale of frequencies in the so-called C-band could approach $80 billion as bidding extends for another week or more, Javid said in an interview.The go-for-broke bidding underscores how crucial these midband frequencies are to companies trying to seize global leadership in emerging 5G technology. The airwaves are expected to drive a yearslong surge of profits when deployed for next-generation mobile devices, autonomous vehicles, health-care equipment and manufacturing facilities.“It’s great spectrum, there’s a lot of it, and it’s coming right as carriers are gearing up to get ready for 5G,” said Doug Brake, director of broadband and spectrum policy at the Information Technology & Innovation Foundation, a nonprofit research outfit.Verizon VersusWhile Verizon was expected to be the biggest bidder in the auction, the carrier may have run into a formidable counterbidder in T-Mobile, thanks to the financial backing of its controlling stockholder, Deutsche Telekom AG.“If you’re Verizon and you don’t get this spectrum, you’ve basically lost the race to 5G,” Javid said.With about $10 billion in additional cash from Deutsche Telekom, New Street Research says T-Mobile could be using the auction to build on an already-large holding of midband 2.5-gigahertz airwaves gained with the takeover of Sprint Corp. in April.T-Mobile already has “a powerful network advantage today, and they may extend it,” New Street Research analyst Jonathan Chaplin wrote in a note Monday.Collectively, the largest bidders had about $70 billion in cash available at the beginning of the auction. But with the total already higher than that, companies like Verizon, AT&T, T-Mobile, Dish and Comcast “may have to tap the bond market in early 2021,” Bloomberg Intelligence analyst Stephen Flynn wrote in a note Monday.In addition to the airwaves licenses, winning bidders also will pay an estimated $13 billion or more to current users of the airwaves, including satellite providers Intelsat SA and SES SA. The satellite companies will change their use of frequencies to make room for the 5G providers.(Update new bid total in first paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg Opinion) -- Could Swedish private equity firm EQT AB succeed where billionaire Carlos Slim failed and push through an acquisition of Dutch carrier Royal KPN NV? The telecoms industry’s depressed valuations certainly make it look feasible.EQT is exploring a bid for KPN, Bloomberg News reported on Friday. The shares jumped as much as 9.8% on Monday, valuing the group at 10 billion euros ($12 billion). Earlier interest from Canadian infrastructure fund Brookfield Asset Management Inc. and a handful of Dutch pension funds failed to produce a concrete bid last year, and America Movil SAB, which is controlled by Slim, had an offer rebuffed back in 2013. The Mexican telecoms operator still has a 16% stake in KPN.Telecoms stocks have been the worst-performing sector in Europe over the past decade apart from banks, prompting executives to seek other ways to generate returns for shareholders. Operators across the region — such as Vodafone Group Plc. in the U.K., Telefonica SA in Spain, Altice Europe NV in France and Portugal and plenty more besides — have started selling stakes in their network assets, which can command enterprise valuations approaching 20 times Ebitda, a profit measure.That’s often more than twice or three times the valuation multiple of the parent company. Infrastructure funds in particular are hungry for the predictable returns that networks can enjoy when decoupled from their consumer-facing businesses.The pattern has prompted a flurry of deal-making activity, not just from funds investing in the infrastructure assets, but from activists pushing telecoms operators to consider such divestments. The likes of Deutsche Telekom AG, Orange SA and Proximus SADP have been able to resist the trend largely because the German, French and Belgian states respectively retain significant holdings in each firm.Macquarie’s $10 billion acquisition of Denmark’s TDC A/S in 2018 may be instructive for EQT. The Australian fund is separating TDC’s consumer business from the networks. It can then lease network capacity both to the new standalone consumer company, which it may sell, and other third-party operators. It’s a playbook you can well imagine EQT following.KPN is one of the few operators that has neither a significant state investor nor has it monetized its networks in this way. That makes it an appealing acquisition target, which is one reason why it was trading at more than 18 times its expected earnings before Friday’s report, higher than the 13 times average of its European peers. Even so, the shares are trading near their lowest levels as a multiple of earnings since 2013.Although the virus might have created some near-term headwinds, the company’s prospects are fundamentally unchanged in the long term, creating an opportunity for a bidder such as EQT. Last year, UBS analyst Polo Tang estimated that a leveraged buyout of KPN at 3.50 euros per share could generate annual returns of 10%. The stock’s average price over the past 50 days was just 2.16 euros, creating an opportunity for even more upside, even if it doesn’t separate its consumer and network operations.What’s more, EQT may be able to avoid a nationalistic or protectionist backlash given it is based in the European Union and says it’s committed to a long-term, sustainable approach to ownership. A bid of between 2.70 euros and 2.75 euros, which Bloomberg Intelligence analyst Erhan Gurses sees as realistic, would value KPN at 18 billion euros including debt. It would certainly be ambitious, but now might just be the time to pull it off.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.