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French company Iliad wants to buy T-Mobile and ruin Sprint's grand plan

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We may soon see a bidding war for T-Mobile. French telecom company Iliad has put in a $15 billion, all-cash bid for the company that would give it a controlling stake of 56.6 percent. The news throws a huge wrench into the months-long narrative that Sprint is preparing to buy its smaller competitor. T-Mobile parent Deutsche Telekom and Sprint have already reached a tentative agreement that would ultimately combine the third and fourth place US carriers, according to previous reports. But Iliad gives T-Mobile another path in taking the fight to its rivals. The Wall Street Journal first reported Iliad's interest in T-Mobile on Thursday afternoon.

Softbank, meet the competition

T-Mobile CEO John Legere has never publicly confirmed any deal with Sprint, a point he underlined during today's financial earnings call. Such an acquisition would face intense scrutiny from federal regulators; AT&T's attempt to buy T-Mobile was rebuffed over concerns that it would irreparably harm competition in the US wireless industry, and Sprint will have to contend with the very same argument if it moves forward. Iliad seems to think its odds are better since it currently has no presence whatsoever in the United States. Instead, it's essentially become the "Uncarrier" of Europe through aggressive pricing — a strategy Legere can relate to. T-Mobile has yet to formally comment on Iliad's offer.

But earlier today on CNBC, Legere admitted that T-Mobile will eventually need help for it to become a true threat to Verizon Wireless and AT&T, the two dominant US carriers. "If I want to be able to bring to the United States wireless industry sustained, real competition, you need more scale than we can organically get to in the short to medium term," he said. "A transaction that brings capital and spectrum would be highly beneficial." Even before the Iliad offer went public, Legere almost tipped his hand. "The opportunity to bring Sprint and T-Mobile together, that's one. But there are many different ways to do this, and we’ll consider all of them," he said.