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Elliott Takes Stake in Deutsche Telekom, Opposes T-Mobile Merger, Bloomberg Reports
Elliott Investment Management has built a sizeable stake in Deutsche Telekom and is opposing a potential full merger with its U.S. subsidiary T-Mobile US, according to a Bloomberg News report citing people familiar with the matter.
Activist's Position
The activist investor has indicated to the German telecom giant that it should explore alternative strategies to unlock shareholder value, the report said. Among the suggested alternatives are larger share buybacks. The exact size of Elliott's stake in Deutsche Telekom could not be determined, according to Bloomberg.
Elliott and Deutsche Telekom did not immediately respond to requests for comment, while T-Mobile declined to comment, Reuters reported.
AdContext on the T-Mobile Deal
Deutsche Telekom currently holds a stake of nearly 54% in T-Mobile US, which stands as its largest and most significant driver of earnings. The potential for a full combination between the two entities, which would represent one of the largest public M&A deals on record, was reportedly being considered by Deutsche Telekom in April.
However, the path to a merger has appeared uncertain. A July report from Semafor indicated that T-Mobile's U.S. executives had informed their German parent company that they no longer supported such a combination. Elliott's involvement adds a new layer of pressure on Deutsche Telekom's strategic decisions regarding its highly profitable American business.
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