The popular arithmetic sets a 54% equity claim against 100% of consolidated debt. Correcting that halves the gap, and then a harder problem shows up underneath.
On 2 September, Bloomberg reported that Elliott Investment Management had built a position in Deutsche Telekom and wanted the company to drop a full combination with T-Mobile US in favour of larger buybacks. Reuters matched it the same day with its own source. Within hours the framing had set: more than 70% of Deutsche Telekom’s value is the American stake, Europe’s largest telecom business is therefore nearly free, and an activist has arrived to prise it out.
I spent two days rebuilding that arithmetic from the filings, and I got it wrong twice before I got it right. The popular version is wrong. My first correction was also wrong. What survives is a claim I can defend line by line, and it doesn’t need a peer table or a valuation opinion to stand up.
Deutsche Telekom owns controlling stakes in three other listed telecoms companies. All three trade in public markets every day. And the German business inside Deutsche Telekom is being valued at less than they are.
There is a film of this piece. It works the sum of the parts on screen, the minority-interest add-back, the lease double-count that produces a ratio Deutsche Telekom does not publish, and the thirty-second check that catches it, with the two SEC filings marked at the figures they carry.
Below the paid line: the 4.7x sum of the parts on one basis, the correction line by line with the two joint ventures the residual absorbs, the EUR 8.5bn segment lease split DT never discloses, the ratings notch a merger costs, and what would change my view.
