KPN has turned down a nearly 18 18 billion takeover offer from a private equity consortium in the past two weeks, and has put pressure on bidders to increase the value of their offer for Dutch Telecom Group.
According to multiple people with direct knowledge of the negotiations, the equity and Stonepeak infrastructure partners have been circling KPN since last year and began conducting appropriate work early last month.
They submitted a bid but the KPN board rejected it, according to a person with direct knowledge of the situation, the pair are now considering extending their offer.
EQT and StonePack were preparing a potential 3-share offer that valued the company at about .5 12.5 billion. The company has a debt of € 5.2bn, giving it an enterprise value of about 18 18 billion at this level. The details of the possible offer were first reported by the Wall Street Journal.
KPN shares were up 2.87 last week before reports of a takeover emerged. The dollar was off.
Such an agreement would be one of the largest private equity buyouts in Europe, according to data from Refinitive Shows. Advent International and Synven bought one of ThyssenKrupp’s elevator businesses last year. .2 17.2bn The deal that was the largest in years.
EQT declined to comment. Stonepeck and KPN did not immediately respond to requests for comment.
Justin Farwark, chief executive of KPN, said last week that any private offer should be considered the best for employees and customers, as well as shareholders.
Farwark pointed to KPN’s investment to mark its intention to expand its telecom network. “We’re going to build a lot of value over the next several years, not immediately, in 12 months from now,” he told a news conference.
Following a joint venture with Dutch pension fund, APG, KPN plans to expand its fiber network to 80 percent of the Dutch population by 2026.
Sai Hee, an analyst at Citi, said in a note that the acceleration of the fiber program over the next three years should give KPN a price of 3.5 3.5 per share, so it seemed possible to get a bid at that level.
The main obstacle to the purchase may be the Dutch government and whether it allows a private equity consortium to acquire a critical national asset. A Dutch telecom veteran described it as an “almost impossible deal” because bidders would have to negotiate with a board that would probably support the government, which could reject any unfavorable bids.
KPN has long been seen as a potential takeover candidate, but potential buyers are at political risk.
Billionaire Carlos Slim-controlled Mexican telecom company America Mavil tried to acquire KPN in 2013 for. 2.2 billion but Blocked by interference Slim, an independent foundation affiliated with the telecom group, still owns one-fifth of KPN’s shares and raised € 2.1 billion through a Dutch subsidiary in February, which could also be converted into shares in the telecom company.
Stockholm-headquartered EQT is already active in European telecoms, with Delta Fiber, a small rival to KPN in the Netherlands, as well as telecom resources in Germany and Sweden. It agreed last month to a £ 3.3 billion deal to buy FirstGroup’s U.S. bus operations using its infrastructure funds. The unit, first student and first transit, includes several thousand yellow school buses.
New York-based Stonepeck has focused on the North American deal.