By Sinead Carew
NEW YORK Nov 11 T-Mobile US Inc
announced on Monday a stock offering that could bring it almost
$2 billion for spectrum purchases.
T-Mobile, the No. 4 U.S. mobile service provider, said it
would sell 66.15 million common shares, or roughly 9 percent of
its existing shares outstanding, and that it could use the
proceeds to buy airwaves to bolster its network capacity for
wireless data services.
Deutsche Telekom, which owns 74 percent of
T-Mobile, said on Twitter that its stake would be cut to 67
percent after the sale, but that it was not selling its shares.
However, T-Mobile shares fell almost 3 percent in
after-market trading after it announced the sale, which would
bring in $1.96 billion, based on T-Mobile's Monday closing
share price of $26.97, and includes an offer of 6.6 million
extra shares for underwriters.
T-Mobile raised concerns among some investors over dilution
of the value of its shares when it said on Nov. 5 it could
raise money for spectrum in an equity offer.
Chief Financial Officer Braxton Carter said in an interview
that day that T-Mobile would be careful to avoid significant
share dilution in an equity offering and that it could also opt
to take advantage of low interest rates in a debt offering.
T-Mobile declined to comment on Monday on the size or the
timing of the offering and which spectrum it might purchase.
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 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 to boost their network capacity to
support customers who are using more and more bandwidth-hungry
T-Mobile has to push hard to regain ground after losing
subscribers for four years. It started to turn the corner with
subscriber growth in the second quarter but it needs more
spectrum to keep competing well with much bigger rivals Sprint,
AT&T Inc and Verizon Wireless .
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.