NEW YORK (TheStreet) -- Iliad (ILIAY), the fourth-largest mobile phone company in France, jumped into the T-Mobile (TMUS) bidding war yesterday, offering $15 billion in a counter to Sprint's (S) higher-price offer. T-Mobile stock was up 0.43% to $33.08 on the news, as of 12:30 p.m. Friday.
But is Iliad's bid realistic?
Iliad controls mobile company Free Mobile in France and considers itself a disruptor in the mobile space, just like T-Mobile. Launched two years ago on the back of a free WiFi hotspot the company had built, Free introduced a mobile plan half the price of what other carriers were charging.
In the process Free Mobile snagged 13% of the French mobile market.
The $33-per-share offer from Iliad for 56.6% of T-Mobile is an all-cash deal that the company plans to finance with debt and equity.
Iliad currently has 14.3 million subscribers, with only 8.6 million of them wireless. This pales in comparison to T-Mobile, with its 50.5 million wireless subscribers.
So far, the offer is considered inferior to the Softbank offer to purchase T-Mobile, with many wondering how Iliad -- with only a $16 billion market cap itself -- would win the approval of Deutsche Telekom, parent company of T-Mobile.
Iliad's offer is $7 per share below the purported $40 a share offer Sprint has offered.
Sprint and T-Mobile are in the process of working out the details of the offer and the regulatory hurdles than exist. This is the main reason the likely initial offer from Iliad was lower -- much too low, according to TheStreet's Antoine Gara. The barriers to approval for Iliad for a T-Mobile buyout are much lower than that of shrinking the U.S wireless market by another player, something that is weighing on U.S regulators.