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[February 07, 2013]
Bidding war looms over phone giant
Feb 07, 2013 (Daily Mail - McClatchy-Tribune Information Services via COMTEX) -- Britain's biggest mobile phone provider could become the centre of a pounds sterling 10bn private equity bidding war.
Orange and T-Mobile collaboration 'EE' is the target of two separate buyout attempts, it is understood.
It is the latest in a series of mega-deals which have emerged this week, including the pounds sterling 16bn buyout of Dell announced on Monday, and the pounds sterling 15bn takeover of Virgin Media confirmed yesterday.
If successful it would be the biggest private equity-led deal since the financial crash, delivering millions of customers into the hands of unaccountable buyout groups.
With 27m customers, EE is the largest mobile phone operator in the UK -- the result of a 2010 deal between France Telecom and Deutsche Telekom.
The group, which trades under the brands EE, Orange and T-Mobile, was formerly called Everything Everywhere.
But reports over the weekend suggested that both parents were looking to offer up to half of their stake on the London stock market in a floatation.
Yesterday it emerged that two consortia are now looking at swooping in.
It is understood that CVC and Blackstone, the private equity partnership that owns Madame Tussauds group Merlin, is one team mulling an offer.
Peers Apax and KKR, both involved in the 2006 buyout of Danish telecoms giant TDC, are said to be the other interested consortium.
Both are considering letting EE's current owners keep a stake of up to 20pc, thus making it easier for them to finance the bumper deal, it was reported.
Sources close to negotiations said that both parties were hoping to raise debts of up to pounds sterling 7bn to help seal the agreement. Talks to secure funding have accelerated since the Dell buyout emerged, it was said. It will be a sign that private equity groups, which can operate outside of the glare of shareholder scrutiny, could be limbering up for another splurge of deals.
But the sight of more sales marching over the horizon will spark worries over the future prosperity of any business which falls under private equity control. None of the private equity groups named commented.
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