Deutsche Telekom Shares Gain as Elliott Builds Stake, Opposes T-Mobile Merger
Activist Investor Elliott Challenges Deutsche Telekom's T-Mobile Merger Plans
(Corrects paragraph 5 to say T-Mobile merger plans were reported in April, not February)
Deutsche Telekom Shares Rise Amid Investor Activity
FRANKFURT, Sept 3 (Reuters) - Deutsche Telekom shares rose 1.9% in early Thursday trading as investors welcomed reports that activist investor Elliott Investment Management had built a stake and was urging the company to drop a potential merger with unit T-Mobile US.
Elliott's Position and Alternative Proposals
Opposition to T-Mobile Deal
Elliott, an activist investor known for high-profile campaigns at some of the world's biggest groups including BP, opposes the T-Mobile deal and would prefer alternative options to unlock shareholder value, including larger share buybacks, according to a person familiar with the matter, who spoke on condition of anonymity because the matter was private.
Details of Elliott's Stake
The fund has built a stake in the German telecommunications company, that person and a second one familiar with the matter said. Reuters could not determine the size of the stake.
Disclosure Requirements Under German Law
Under German law, shareholdings above 3% must be disclosed publicly.
Background on Deutsche Telekom and T-Mobile Merger Plans
Deutsche Telekom holds around a 54% stake in T-Mobile. In April, Reuters reported the company was exploring a deal to combine with the U.S. arm to create a transatlantic telecoms giant, a plan that has faced shareholder opposition and weighed on its shares.
Comments and Reporting
Deutsche Telekom and Elliott were not immediately available for comment. T-Mobile declined a Reuters request for comment on Wednesday. Bloomberg News first reported the news on Wednesday.
(Reporting by Emanuele Berro in Gdansk, Christoph Steitz in Frankfurt and Anousha Sakoui in London, editing by Milla Nissi-Prussak)
