Dutch incumbent KPN has reportedly hired JP Morgan to advise on a new sales process for Belgian mobile unit Base.
KPN may ask about €1bn (US$1.1bn) for the unit, which it last tried to sell in 2012, Bloomberg reported.
Acquisitive Luxembourg-based…
Dutch incumbent KPN has reportedly hired JP Morgan to advise on a new sales process for Belgian mobile unit Base.
KPN may ask about €1bn (US$1.1bn) for the unit, which it last tried to sell in 2012, Bloomberg reported.
Acquisitive Luxembourg-based telecoms holding Altice, pan-European cableco Liberty Global, which has a majority stake in Belgian cableco Telenet, and sponsors could be interested in bidding, analysts have speculated.
KPN, Altice and Liberty Global have declined to comment on the matter.
ABN Amro analyst Marc Hesselink said the €1bn price tag would value Base, Belgium’s third-largest mobile provider, at 6.7 times its 2015 EBITDA, slightly higher than his team’s €900m valuation.
Hesselink believes the sale would attract both strategic buyers and buyout firms, with the former most likely to succeed as synergies will be needed to make Base profitable again.
Altice and Telenet are the most likely buyers, in his view. He noted that the synergy potential would be much greater with Telenet given Altice’s small Belgian footprint.
“We would welcome a sale of Base as we see limited synergies and room for KPN to improve operations,” he said. “Still, the impact will be small as Base is just 5% of KPN’s group EV.”
KPN called off the 2012 sales process for Base, which had aimed to raise a reported €1.8bn, as it considered bids unsatisfactory.
KPN reported revenues of €8.1bn for 2014, down 4.6% on the previous year’s result. EBITDA was also down 4.6% to €3bn.
Revenues and other income for Base in 2014 were down 2.3% year-on-year to €711m, while adjusted EBITDA dropped 22% to €149m. Base’s share of the mobile market declined by 22% last year, according to KPN’s annual report.
KPN completed the sale of its German mobile unit E-Plus to Telefonica last October in a €8.6bn deal. The Dutch telco raised €5bn in cash from the sale and received a 20.5% stake in Telefonica Deutschland. However, its tax book loss related to the sale stood at €5bn, which should offset its taxable income in the Netherlands in the coming years.
KPN’s largest shareholder is Carlos Slim’s America Movil with a 21.4% stake, followed by Franklin Mutual Advisers with a 6.36% stake and Paulson & Co with a 4.54% holding. The remainder is listed.
