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Maxime Lombardini (right), chief executive officer of French broadband Internet provider Iliad, and Thomas Reynaud, Iliad chief financial officer, attend the company's 2014 first-half results presentation in Paris on Sept. 1, 2014.CHARLES PLATIAU/Reuters

Billionaire Xavier Niel's Iliad SA is talking to private-equity firms about teaming up to make an improved offer for Deutsche Telekom AG's T-Mobile US Inc. unit, according to people familiar with the matter.

Iliad's discussions with potential partners may accelerate after Deutsche Telekom indicated it's willing to negotiate a sale if a bid puts a valuation of at least $35 (U.S.) a share on the business, said the people, who asked not to be identified because the talks are private. The German company hasn't received a new proposal and there's no guarantee a higher offer will be made, they said.

Financial and industrial partners have approached Iliad about a joint offer for T-Mobile, chief financial officer Thomas Reynaud said at a press conference in Paris Monday. Iliad has been talking to U.S. buyout firms as well as companies and sovereign-wealth funds, the people said.

"Our offer is still valid, and probably even more relevant than at the end of July," Mr. Reynaud said, calling a joint bid for a larger T-Mobile stake "one of the options."

Iliad's previous cash offer of $33 a share, or $15-billion, for a 56.6-per-cent stake in T-Mobile, was rejected as too low a month ago. At a strategy meeting on Aug. 28, Deutsche Telekom senior managers discussed $35 to $40 as a realistic per-share valuation range at which the carrier would be willing to begin negotiations, said a person familiar with the matter. Mr. Reynaud declined to say whether Iliad plans to increase its bid.

Deutsche Telekom's valuation of T-Mobile opens the door for an improved bid from Iliad or new proposals from potential suitors such as Dish Network Corp. after Sprint Corp. last month withdrew from talks to buy the unit. Iliad is aiming to replicate in the U.S. its French tactics of gaining market share with rock-bottom prices. Mr. Niel is confident T-Mobile could increase profit even while aggressively cutting prices and costs, a person familiar with the matter has said.

Iliad's last proposal projected $10-billion in potential savings and gave an overall value for T-Mobile of $36.20 a share by including such synergies. T-Mobile shares closed at $30.08 a share on Aug. 29 in New York, valuing the company at $24.3-billion. North American markets were closed Monday for the Labour Day holiday.

Iliad shares slid 8.8 per cent to €152.45 ($218 Canadian) in Paris for their steepest decline in eight months, cutting the company's market value to $11.6-billion (U.S.). Deutsche Telekom added 0.8 per cent to €11.47 in Frankfurt.

Investors are cautious as they're waiting to see if Iliad will increase its offer, said Miguel Borrega, an analyst at Espirito Santo Investment Bank in Lisbon. "We find it hard to believe the synergy projections" that would justify a higher bid for T-Mobile, he said.

Some Iliad shareholders are also concerned about slowing growth in its French home market, Mr. Borrega said.

Iliad's Mr. Reynaud reiterated that a potential capital increase by Iliad to finance a T-Mobile bid won't exceed €2-billion. As owner, Iliad could lift T-Mobile's profit margins to more than 30 per cent in several years, compared with about 20 per cent, he said.

Sprint, which was said to have discussed an offer of about $40 per T-Mobile share with Deutsche Telekom, walked away from talks because of concerns regulators may block a transaction that would cut the number of nationwide U.S. wireless providers to three from four. A successful bid by Iliad would preserve the status quo.

Deutsche Telekom, which owns about 67 per cent of T-Mobile, based in Bellevue, Wash., would consider forgoing a higher price if that meant avoiding the uncertainty of a prolonged regulatory review, said people familiar with the matter last month.

The company wants to avoid reliving its failed attempt to sell T-Mobile to AT&T Inc. for $39-billion. After that accord in 2011 was opposed by the U.S. Federal Communications Commission and the Department of Justice, T-Mobile proceeded to merge with MetroPCS Communications Inc.

Iliad's bid is the boldest move yet by Mr. Niel, a 47-year-old entrepreneur who got his start with a sex-chat service on Minitel – France's now-defunct precursor to the Internet – and is now France's eighth richest person, according to the Bloomberg Billionaires Index.

In the telecommunications industry, Mr. Niel's move to fame came from pioneering so-called triple-play packages combining TV, broadband and land-line services.

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Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 29/12/23 11:59pm EST.

SymbolName% changeLast
DISH-Q
Dish Network Corp
+1.94%5.77
S-N
Sentinelone Inc Cl A
+2.07%22.68
T-N
AT&T Inc
+2.15%17.55
TBB-N
AT&T Inc 5.350% Global Notes Due 2066
-0.49%24.14
TMUS-Q
T-Mobile US
+0.56%162.01

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