D.Telekom pressed to do M
Deutsche Telekom AG’s major shareholder, the German state, is pressing it to make large acquisitions in the hope of raising its sagging share price, a source familiar with the government’s thinking said.
“Berlin is very clearly on an expansion course and is putting pressure on Deutsche Telekom,” the source told Reuters on Monday, as speculation swirled the German company could bid for U.S. wireless phone company Sprint Nextel (S.N: Quote, Profile, Research).
A source close to the company said Deutsche Telekom (DTEGn.DE: Quote, Profile, Research) had been looking at Sprint Nextel since the U.S. company announced a huge goodwill writeoff in February. The person said no decision had been taken on whether to bid.
The Berlin government still owns around a third of the former state-owned company, has a representative on its supervisory board and has a major say in company decisions.
Asked about Telekom being interested in Sprint Nextel, German Finance Minister Peer Steinbrueck told reporters in Berlin he considered it to be “a rumor, like so much else”.
Deutsche Telekom’s chief executive, Rene Obermann, has said he wants to grow the group’s mobile phone business through acquisitions to compensate for a dwindling fixed-line business and has linked his performance to boosting the share price.
Telekom shares lost 1.5 percent to close at 11.61 euros, the second-biggest decliner among German blue-chips .GDAXI faxless online payday advances. Sprint shares were up 4.3 percent at $8.23 by 1751 GMT.
Such a deal would vault Deutsche Telekom’s T-Mobile USA unit past AT&T (T.N: Quote, Profile, Research) and Verizon Wireless (VZ.N: Quote, Profile, Research) (VOD.L: Quote, Profile, Research) to the number one spot among U.S. mobile phone service providers, but industry experts were skeptical Telekom would pull it off.