With the Justice Department suing to block AT&T’s $39 billion purchase of T-Mobile USA, some have begun wondering what would happen to the country’s fourth-largest wireless provider should the deal fall through. That includes T-Mobile’s parent company, Deutsche Telekom, which is reportedly looking at options for its American business.

Bloomberg reports that, while publicly supporting AT&T’s legal fight to continue with the merger, Deutsche Telekom is quietly investigating the option of spinning off T-Mobile USA to shareholders. The biggest drawback of an IPO, explain analysts, is that it would likely only bring in about $28 billion, significantly less than the offer from AT&T.

Sources also tell Bloomberg that DT is considering going back to some of the companies it flirted with before announcing the AT&T deal last spring. Of course, the German company is contractually blocked from officially discussing other offers while the AT&T deal is still a possibility, leaving it with little in the way of options.

Additionally, analysts say that, because AT&T would owe DT billions if the deal falls through, it would be in the Death Star’s best interest to prolong the regulatory review process for as long as possible. Meanwhile, the longer the deal drags on, the more it hurts Deutsche Telekom, as competitors scoop up uncertain consumers:

This uncertainty will be most damaging to T-Mobile and Deutsche Telekom, which we presume will not be able to exercise the deal’s break-up provisions and may be precluded from seeking alternative options… A blocked deal would leave T-Mobile a weak fourth-place national operator with a parent highly unlikely to commit additional investment and an unappealing shortlist of alternative suitors.

Deutsche Telekom, AT&T at Odds Over Deal [Bloomberg]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.