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VoiceStream gets $53B bid
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July 19, 2000: 8:07 p.m. ET
Report: Deutsche Telekom offers $206.50 per share for U.S. wireless operator
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NEW YORK (CNNfn) - Germany's Deutsche Telekom AG has submitted a roughly $53 billion bid to purchase U.S. firm VoiceStream Wireless Corp., a massive premium above the company's closing price Wednesday, The Wall Street Journal's online edition reported Wednesday evening.
The Journal, citing people familiar with the situation, said the German telecommunications company, has offered $206.50 in cash and stock per Voicestream (VSTR: Research, Estimates) share - a 42 percent premium above the company's closing price of 145-1/2 Wednesday.
A spokeswoman for VoiceStream said the company has no comment on the report.
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CNNfn's Jim Boulden reports on the possible deal.
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"My initial call when this was reported as a possible $30 billion deal was, 'That is a nice number, but if they are serious they will have to start at 40 and if there are competitors that number will have a 5 in front of it,'" Frank Marsala, analyst with ING Barings, told CNNfn. "I think it's a real, on-the-table offer."
"If they were the only bidder, (the bid) probably would have been closer to 175 (dollars per share), but they really stepped up to the plate and said go home (to potential rival bidders)."
Marsala said NTT DoCoMo, which was reportedly mulling a $52 billion bid for VoiceStream, was the biggest threat to Telekom.
A source familiar with the situation told CNNfn Wednesday that Deutsche Telekom had set its sights on the Bellevue, Wash.-based company, which provides digital wireless services to more than 2.3 million customers in 19 of the top 25 U.S. markets.
Christopher Larsen, analyst with Prudential Securities, said Telekom's deep pockets would help VoiceStream go after additional licenses and boost its presence.
 Deutsche Telekom, Europe's second-biggest telecom company, has been on the prowl for a U.S. telecommunications firm recently, boasting a more than $100 billion war chest to spend on acquisitions.
The reported offer may indicate Deutsche has called off its pursuit of Sprint Corp. (FON: Research, Estimates), which recently canceled its $117 billion merger with Worldcom Corp. (WCOM: Research, Estimates).
"Deutsche Telekom wants a path of least resistance into the U.S. market and this is certainly easier than Sprint," Marsala said. "But there will be regulatory concerns."
But any deal for VoiceStream would still leave Deutsche Telekom without a significant traditional U.S. telephone presence.
According to analysts, the most likely landline target for Telekom would be Qwest Communications (Q: Research, Estimates), the No. 4 U.S. long-distance company behind Sprint.
Larsen said if VoiceStream is gobbled up, Nextel Communications (NXTL: Research, Estimates) will be the last independent wireless carrier and could be ripe for a takeover.
VoiceStream shares inched up 15/16 to close at 145-1/2 Wednesday, but soared in after-hours trading on word of the offer. The stock traded up 24-3/16, nearly 17 percent, to 169-11/16. 
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Deutsche Telekom
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