This article first appeared on GuruFocus.
Deutsche Telekom (DTEGY) shares rose 2% early Thursday after reports that activist investor Elliott Investment Management has taken a stake and is pushing back against a potential combination with T-Mobile US.
The size of Elliott’s position remains unknown. German rules require investors to disclose holdings once they exceed 3%, but no such filing has been reported so far.
Elliott is seeking alternatives that could return more cash to shareholders, including potentially larger share repurchases. Deutsche Telekom owns about 54% of T-Mobile, making any decision over the U.S. business important to the German group.
Talk of combining the two companies surfaced in April as Deutsche Telekom explored a larger transatlantic telecommunications group. The proposal has faced resistance from some shareholders and has weighed on Deutsche Telekom shares, Reuters reported.
The market’s initial response suggests investors may view Elliott’s involvement as a potential catalyst for capital-allocation changes, though the dispute could also add uncertainty around the company’s plans for T-Mobile.
Elliott’s involvement could support Deutsche Telekom shares if pressure leads to higher buybacks or a change in the proposed deal.