Orange move for T-Mobile fails

Orange is understood to have made an offer for T-Mobile’s British operation but has been rebuffed by the company’s German parent, Deutsche Telekom, according to a report in The Observer newspaper last Sunday.

News of the approach, made within the last few months, comes as the new boss of T-Mobile UK, the country’s fourth-largest network, prepares to take up his post this week. He is expected to launch a restructuring of the business to turn around its flagging fortunes, but private equity bidders are understood to be circling already, said the paper.

Vodafone is also rumoured to have proposed swapping its Turkish business for T-Mobile UK, which would give Deutsche Telekom a strong position in the eastern Mediterranean as it controls Greek operator OTE. This deal, however, has been denied by sources close to Vodafone.
Earlier this month, Deutsche Telekom created speculation that it was willing to offload its underperforming UK operation by writing down the value of the business on its books to just £3.3 billion.

The German government and private equity company Blackstone, both shareholders in Deutsche Telekom, have previously pushed for a sale of the UK business. The German company’s management, however, believe new UK chief executive Richard Moat should be given the time to resuscitate it, so as to avoid a fire sale. At the time of Deutsche Telekom’s financial results this month, its chief executive, René Obermann, said the UK operation should be given a chance in the “medium term”.

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