Deutsche Telekom is in talks about a potential offer for SoftBank Group’s 8.5% stake in T-Mobile US in a bid to gain greater control over its Bellevue-based U.S. affiliate, according to people familiar with the matter.
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, said the people, 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 where T-Mobile US’s shares were trading at the time. Since then, the stock has gone up more than 30%; it closed Wednesday at $134.35, down 0.5%. 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 $26.5 billion merger with Sprint, 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’ closing price Tuesday. Deutsche Telekom currently owns 43% of T-Mobile US.
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 12 months, with SoftBank’s Vision Fund investment arm driving recent profits after being the source of its biggest loss a year ago.
The Seattle Times business staff contributed to this report.