The new offer was for 67 percent of T-Mobile and valued the stock at $36 a share including cost savings, Paris-based Iliad said today. Not counting those synergies the bid remained at $33 a share, according to a person familiar with the matter, who asked not to be named because the details aren’t public. Iliad’s previous $15 billion cash bid, or $33 a share, for a 56.6 percent stake was rejected in August as too low.

T-Mobile shares fell 2.5 percent in New York trading Monday. Iliad, the smallest of France’s mobile carriers, is the second suitor to walk away this year, after Japanese billionaire Masayoshi Son’s Sprint Corp. unit abandoned a merger plan with T-Mobile. For Deutsche Telekom, this is at least the third missed chance to sell T-Mobile in recent years, including a 2011 deal with AT&T Inc. that was later called off because of regulatory opposition.

“Thank God this is over,” said Heinz Steffen, an analyst at Fairesearch GmbH in Kronberg, Germany. “The offer was a joke. I think Iliad really meant it seriously, given the resources they invested in the process, but it was a desperate attempt of the small guy buying the big guy.”

Andreas Fuchs, a spokesman for Bonn-based Deutsche Telekom, declined to comment, as did Anne Marshall, a spokeswoman for Bellevue, Washington-based T-Mobile.

Private Equities

Iliad’s decision followed “exchanges” with Deutsche Telekom and board members of T-Mobile who have “refused to entertain its new offer,” the French carrier said.

While a U.S. exit would have allowed Deutsche Telekom — which gets almost a third of its revenue from T-Mobile — to focus on the European business, its board was recently split over whether the German carrier should sell its only growing asset, people familiar with the matter said last month. Deutsche Telekom is inclined to wait out a U.S. frequency auction scheduled for November before committing to any strategic decision on T-Mobile, the people said.

Iliad had held talks with potential partners including buyout firm KKR & Co. to raise additional debt and equity, people familiar with the matter have said. In its statement, Iliad said it put together “a consortium with two leading private-equity funds and tier-1 international banks,” without identifying them. Iliad will continue its policy of “profitable growth,” it said.

Dish Network?

T-Mobile shares closed 69 cents lower at $26.92 in New York. Iliad dropped 1.8 percent to 156.15 euros in Paris, taking its decline to more than 20 percent since the company confirmed its interest in T-Mobile on July 31.

Iliad’s withdrawal leaves Charlie Ergen’s Dish Network Corp., the U.S. satellite-TV provider that’s expanding in wireless services, as a potential bidder.

Ergen, Dish’s chairman, recently contacted Deutsche Telekom to say he is interested in a future acquisition of T-Mobile, people with knowledge of the matter said in early September. Dish, the second-largest U.S. satellite-TV provider, has told Deutsche Telekom that it may be interested in a deal after the November auction, said the people.

Bob Toevs, a Dish spokesman, declined to comment on Iliad’s withdrawal.

French Market

For Niel, Iliad will now be left focusing on France. Market-share gains in the country, thanks to a strategy of winning users by slashing prices in mobile and landline packages, had pushed Iliad’s stock in June to its highest level since its 2004 initial public offering. Niel, 47, has a net worth of $6.8 billion, according to the Bloomberg Billionaires Index.

T-Mobile won’t be Niel’s first major setback either. Iliad failed this summer to reach a deal with rivals Bouygues SA and Orange SA to consolidate the French market. Earlier this year, Iliad tried to get its hands on Bouygues’s mobile network as Bouygues sought to buy Vivendi SA’s SFR — only to have the plan scuttled when Vivendi sold SFR to Numericable Group SA.

Niel’s failed bid in the U.S. doesn’t mean the businessman will pursue other acquisitions, according to a person familiar with the matter. Niel is unlikely to revisit a deal with Bouygues, and Iliad isn’t interested in expanding into Spain with a purchase of wireless carrier Yoigo from TeliaSonera AB, the person said.

A flurry of acquisitions in and beyond the telecommunications industry is being spurred by low investment yields and cheap borrowing rates. Phone companies are trying to combine as costs rise for high-speed fourth-generation networks while competition and regulatory pressures weigh on phone bills.