Parent company prefers partial listing to sale of EE and agrees Vodafone TV deal in Germany
Deutsche Telekom says that it values its share in EE at £10 billion ahead of a possible initial public offering (IPO).
The German company owns half of EE, a joint venture formed with France Telecom following the merger of Orange and T-Mobile in 2010 and the UK’s largest operator in terms of subscribers.
Many analysts view the joint-venture as a short-term arrangement with speculation that the partners could be prepared to sell the business. However, following a strategic review last year, an IPO is believed to be the preferred option going forward.
EE IPO imminent
It was reported last month an IPO was imminent after both France Telecom and Deutsche Telekom had hired banks to advise them on such a course of action. Deutsche Telekom CFO has now reiterated that a partial listing remains its preference.
“Such a process needs good timing,” he reportedly told Deutsche Telekom’s annual shareholder meeting. “We need to wait for the right moment to place such a huge amount on the market. We don’t have to, but when the opportunity is there we can do it.”
However, speculation about a possible sale has not gone away. Former EE boss Tom Alexander has been in talks with private equity groups about a possible bid, while US telecommunications company AT&T has also been linked with a bid as it seeks to expand into Europe.
KKR and CBC Capital Partners have also reportedly been in discussions with banks to raise money for a potential £9 billion buyout of EE, but any takeover bid would be ambitious given the size of the business.
In a separate announcement, Deutsche Telekom has agreed a deal with Vodafone that will allow the British operator to offer television services to its German customers over broadband.
The deal is subject to approval from German regulators, but if approved, would allow Vodafone to compete with other companies capable of offering ‘quad play’ packages of mobile, landline, television and Internet services.
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