By Sinead Carew
NEW YORK Nov 11 T-Mobile US Inc, the
No. 4 U.S. mobile service provider, said on Monday that it would
sell 66.15 million common shares, representing roughly 9
percent of its existing shares outstanding, sending its shares
down almost 3 percent in late trade.
T-Mobile said it may use the proceeds to buy spectrum.
The plan implies a transaction value of $1.96 billion, based
on T-Mobile's closing share price on Monday of $26.97, and
includes an offer of 6.6 million extra shares for underwriters.
Deutsche Telekom, which currently owns 74 percent
of T-Mobile, said on Twitter that its stake would be reduced to
67 percent as a result of the share sale, but it was not selling
its own shares.
T-Mobile raised concerns among some investors over dilution
of the value of its shares when it said on Nov. 5 that it could
look to raise money for spectrum purchases via a debt or equity
New Street analyst Jonathan Chaplin said the timing of the
offering was surprising as he had expected T-Mobile to wait
until closer to the time of a government auction of spectrum
licenses owned by broadcasters, slated for 2014 or later.
Chaplin said the timing of the offering may mean that
T-Mobile wants to raise funds ahead of a spectrum auction, which
is expected to go ahead in January with bidders including Dish
Network and Sprint Corp.
"There is a chance that they may get involved in the
LightSquared process, but this seems unlikely," Chaplin said.
LightSquared Inc, a wireless telecoms business, is in
bankruptcy, and its spectrum assets are to be sold at auction,
which is expected to take place in December
So far, satellite TV provider Dish is the only company that
has publicly expressed interest in the LightSquared spectrum.
T-Mobile said on Monday that it has 728.7 million shares
outstanding, including Deutsche Telekom's stake. Other
shareholders own roughly 190 million shares.
Many U.S. mobile operators have been looking to increase
their spectrum holdings because additional airwaves can boost
network capacity to support customers who are using more and
more bandwidth-hungry data services.
T-Mobile has to push hard to regain ground after losing
subscribers for four years. It started to turn the corner in the
The company's shares fell almost 3 percent in after-the-bell
trade to $26.25 after closing down 2.5 percent in the regular
New York Stock Exchange session.
T-Mobile said that Morgan Stanley, Goldman, Sachs, J.P.
Morgan, Credit Suisse and Deutsche Bank are the joint
book-running managers for the offering.