Iliad in talks with investors to improve T-Mobile bid: sources

LONDON (Reuters) - French telecom firm Iliad is in talks with investors to improve its bid for T-Mobile US because it expects parent company Deutsche Telekom will reject its $15 billion offer, three sources familiar with the matter said.

Bringing in more investors would help Iliad raise the cash portion of its $33 per share stock and cash bid for a 56.6 percent stake in T-Mobile , the No. 4 U.S. mobile operator, said the sources who asked not to be named because the talks are private.

Deutsche Telekom , which is currently in advanced talks with Sprint, the U.S. No 3 mobile operator controlled by Japanese firm Softbank Corp <9984.T>, is expected to reject Iliad's bid as too low, the Financial Times reported on Tuesday.

Iliad is in talks with U.S. satellite and cable operators including Dish Networks , Cox Communications [COXC.UL] and Charter Communications which could be interested in a joint-bid for T-Mobile as they seek to enter the U.S. mobile market, said the sources.

Iliad is also talking to infrastructure and pension funds such as Ontario Teachers Pension Plan (OTPP) and sovereign wealth funds including Singapore's GIC, said the sources.

Earlier this year, GIC and OTPP demonstrated their interest in mobile investments when they agreed to back France's third mobile operator Bouygues Telecom in its failed bid for domestic rival SFR, which was acquired by French cable operator Numericable .

OTPP declined to comment. Iliad, Dish, Cox Communications, Charter Communications, GIC were not immediately available for comment.

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 a more streamlined, efficient way as it has done with its challenger Free Mobile service in France, sources earlier told Reuters.

But Deutsche Telekom has doubts about the cost savings goal that Iliad has touted, sources said on Monday, and analysts in the U.S. have also been skeptical.

(Additional reporting by Liana Baker in New York; Editing by Leila Abboud)

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