Elliott has built stake in Deutsche Telekom, opposes T-Mobile merger, Bloomberg News reports
Elliott says Deutsche Telekom should pursue share buybacks instead of a transatlantic tie-up with T-Mobile US, Bloomberg News reported.
- On Tuesday, Bloomberg News reported that Elliott Investment Management has built a sizeable stake in Deutsche Telekom and is urging the company to abandon a potential merger with T-Mobile.
- Deutsche Telekom holds a 54% stake in T-Mobile, its primary earnings driver, with ties dating back around 25 years; CEO Timotheus Hoettges told investors in February the company was assessing ways to increase its ownership.
- A potential merger would have created the world's largest wireless operator by market value, surpassing China Mobile, as Deutsche Telekom has a market capitalization of around $157 billion, trailing T-Mobile's $200 billion.
- Elliott suggests Deutsche Telekom prioritize alternative value-unlocking strategies, including larger share buybacks, while T-Mobile executives previously informed the German company in July they no longer support a merger.
- T-Mobile declined a Reuters request for comment regarding the report, and Elliott and Deutsche Telekom did not immediately respond to requests for comment on the activist investor's position.
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Deutsche Telekom's share is on the rise: the growing participation of the US hedge fund Elliott in the Bonn Group is the reason. What will become of the merger with the US subsidiary T-Mobile?
Elliott Investment Management set up an equity stake in Deutsche Telekom, according to one person with knowledge of the subject. The exact size of the slice of the investor activist in the German telecommunications company could not be determined. Exclusive material for subscribers. To have full access, access the link of the subject and register.
The activist investor Elliott has joined Deutsche Telekom and is said to be against a merger with the US subsidiary T-Mobile.
The investor is said to have built up a larger stake in Deutsche Telekom. Instead of a possible merger with the US subsidiary T-Mobile, he is committed to buy back shares.
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