French telecoms firm Iliad will be hard-pressed to meet its goal of generating $2 billion in additional annual operating profit at T-Mobile US Inc by cutting costs and slashing prices if its takeover bid is accepted, analysts said. Iliad, which in recent years has shaken up the French mobile market with cheap subscriber plans, bid $15 billion last week for a 56.6 percent stake in T-Mobile, the No. 4 U.S. mobile operator.The Paris-based company, majority owned by billionaire founder Xavier Niel, said a merger would result in $10 billion in synergies and an additional $2 billion in annual earnings before interest, taxes, depreciation, and amortization (EBITDA).It would hit those targets by running T-Mobile, majority owned by Deutsche Telekom AG, in an "Iliad-like" way, sources familiar with the takeover bid told Reuters.Even if successful in its takeover bid, Iliad faces significant obstacles in reaching those cost savings and negotiating better deals with U.S. cellular transmission tower operators, said Roger Entner, an analyst at Recon Analytics in Boston.
Shares of TMUS traded higher by 1.46% or $0.48/share to $33.42. In the past year, the shares have traded as low as $22.95 and as high as $35.50. On average, 4112610 shares of TMUS exchange hands on a given day and today's volume is recorded at 8671544.
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