AT&T's ( T , quote ) bid to acquire T-Mobile from Deutsche Telekom ( DETGY , quote ) could be rescued the same way the antitrust case against IBM ( IBM , quote) was dismissed decades ago.
The anti-trust suit against IBM evolved during the term of Lyndon Johnson, a liberal Democrat. It was dismissed "without merit" in 1982 by President Ronald Regean, a pro-business Republican. A similar turn of events could take place with the T-Mobile sale, if AT&T (T) proceeds and a pro-business president is elected. Even if AT&T drops the current effort, it could reach an agreement with Deutsche Telekom (DTEGY) for T-Mobile after November 8, 2012 if a Republican wins. The acquisition of T-Mobile is a huge plus for AT&T, as manifested by the $39 billion price tag and the opposition of Sprint-Nextel ( S , quote ). Selling it is an even bigger addition by subtraction for Deutsche Telekom. This is certainly needed. Now around $11.60, Deutsche Telekom (DTEGY) is down from its 52-week high of $16.85. Its price-to-earnings ratio is over 250. Its returns and margins are anemic. Both revenues and earnings are also down. Not surprisingly, T-Mobile has been losing subscribers, about 850,000 over the last year. As pointed out in a recent Financial Times article, "AT&T/Mobile," there is no other buyer for Deutsche Telekom to puruse. Other alternatives, such as a spin-off, are "less attractive," according to the Financial Times .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.