Private equity buyers are reportedly at the front of the queue in the Credit Suisse-managed sale of underperforming T-Mobile Netherlands by Deutsche Telekom. A potential sale could clear the way for a German acquisition of Dutch incumbent KPN.
Private equity buyers are reportedly at the front of the queue in the Credit Suisse-managed sale of underperforming T-Mobile Netherlands by Deutsche Telekom (ETR:DTE).
A potential sale could clear the way for a German acquisition of Dutch incumbent KPN (AMS:KPN).
Apax Partners and CVC Capital Partners are both preparing indicative offers that are due on 16 November, according to a Reuters report citing sources familiar with the matter.
The report suggested that US firms Providence and Bain Capital were likely to enter the race, but that no strategic buyers had yet come forward.
The German giant has not confirmed the sale process, but CEO Tim Höttges has been quoted saying that Deutsche Telekom had been unable to create a value enhancing strategy at T-Mobile Netherlands. In its Q3 report, Deutsche Telekom reported that its subsidiary’s EBITDA was down 8.2% on the equivalent quarter in 2014.
A recent report suggested €4.9bn (US$5.6bn) price tag, basing this on the 7.8x EBITDA multiple Deutsche Telekom had set for its stake in EE to BT. The Dutch subsidiary achieved a 2014 EBITDA of €630m (US$715m).
Deutsche Telekom, Apax, CVC, Providence and Bain declined to comment on the report.
Previously touted as a likely suitor was Liberty Global, which owns leading cableco Ziggo but lacks a significant mobile presence. Iliad founder Xavier Niel, who has acquired share options in 15% of Telecom Italia, was also linked to possible interest.
Deterrents to strategics, which in recent years outmuscled private equity, include regulatory uncertainty around in-market consolidation, T-Mobile Netherland’s worsening performance, and this week’s launch of Tele2’s low-cost Dutch services.
KPN open to M&A
Speaking in Barcelona yesterday, KPN CEO Eelco Blok was quoted as saying his company was theoretically open to cross-border consolidation could offer value to shareholders, but added that it had not been approached.
In recent years, KPN has agreed to sell off assets in neighbouring Germany (E-Plus) and Belgium (Base), but fought off a full takeover by shareholder América Móvil, which has since headed towards the exit door via exchangeable bonds. Earlier this week, it sold a 5% stake in Telefónica Deutschland.