KPN has rejected a takeover offer worth about €18bn from a private equity consortium in the past two weeks, putting pressure on the bidders to raise their offer price for the Dutch telecoms group.

EQT and Stonepeak Infrastructure Partners have been circling KPN since last year and started conducting due diligence earlier last month, according to multiple people with direct knowledge of the talks.

They lodged a bid but this has been rejected by the KPN board, with the pair now considering whether to raise their offer, according to a person with direct knowledge of the situation.

EQT and Stonepeak were preparing a possible €3-a-share offer that would value the company at about €12.5bn. The company has €5.2bn of debt, giving it an enterprise value of almost €18bn at that level. The details of the potential offer were first reported by The Wall Street Journal.

KPN shares closed last week at €2.87 having traded as low as €2 prior to the reports of a takeover emerging.

Such a deal would be one of Europe’s largest-ever private equity buyouts, data from Refinitiv show. Advent International and Cinven last year bought Thyssenkrupp’s lifts business in a €17.2bn deal that was the largest in years.

EQT declined to comment. Stonepeak and KPN did not immediately respond to requests for comment.

Joost Farwerck, chief executive of KPN, said last week that any take-private offer would need to be considered to be in the best interests of employees and customers as well as shareholders.

Farwerck pointed to KPN’s investment in upgrading its telecoms network as a sign of its intent to grow. “We’re going to create a lot of value, maybe not immediately in 12 months from now, but over a number of years,” he said on a media call.

KPN has set out a plan to expand its fibre network to 80 per cent of the population of the Netherlands by 2026 after forming a co-investment joint venture with APG, a Dutch pension fund.

Siyi He, an analyst with Citi, said in a note that the acceleration of the fibre programme over the next three years should value KPN at €3.5 a share, so a bid at that level looked possible.

The main impediment to a buyout could be the Dutch government and whether it would allow a private equity consortium to acquire a critical national asset. One Dutch telecoms veteran described it as an almost “impossible deal” as bidders will have to negotiate with a board that will probably be backed by the government, which could quash any hostile bid.

KPN has long been seen as a potential takeover candidate but potential buyers have been deterred by political risk.

América Móvil, the Mexican telecoms company controlled by billionaire Carlos Slim, tried to acquire KPN for €7.2bn in 2013 but was blocked by the intervention of an independent foundation linked to the telecoms group. Slim still has a fifth of KPN’s shares and in February raised €2.1bn of bonds via a Dutch subsidiary that can also be converted into shares in the telecoms company.

Stockholm-headquartered EQT is already active in European telecoms, owning Delta Fiber, a small rival to KPN in the Netherlands, as well as telecoms assets in Germany and Sweden. It agreed a £3.3bn deal last month to buy FirstGroup’s US bus operations using its infrastructure fund. The units, First Student and First Transit, include tens of thousands of yellow school buses.

New York-based Stonepeak focuses on North American deals.

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