IP-O2: Mobile operator strongly considering stock market float
O2 is strongly considering a stock market flotation, City PM understands.
An initial public offering (IPO) is one of a number of options being looked at by the mobile operator following its failed merger with Three.
However private equity firms are understood to be planning bids for O2, owned by Spanish company Telefonica, which could be helped by involvement with Sky. And O2’s chief executive Ronan Dunne is meanwhile said to be exploring an £8.5bn management buyout.
Read more: Private equity firms reportedly circling O2 after Three merger blocked
A number of private equity firms were immediately linked with interest in O2 following the breakdown of the Three merger, including Apax Parters, CVC Capital, KKR, TPG, Bain and Apollo.
And City PM understands private equity firms have held early-stage discussions that would see Sky become involved in the deal.
It is understood Sky’s role in any private equity deal would not see it take a stake in O2 but instead expand its relationship as it gears up to launch its own mobile network this year.
Sky had a similar agreement with Hutchinson. If the Three merger, which Sky publicly backed, had gone ahead, Sky would have paid £2bn over a number of years to take 20 per cent of the combined network's capacity, according to the Telegraph.
Read more: Was the European Commission right to block the Three-O2 merger?
Sky and O2 declined to comment, while each of the private equity companies has yet to respond to request for comment.
The European Commission competition regulator blocked Three owner CK Hutchinson’s £10.25bn takeover of O2, which would have merged the mobile operators, earlier this month.
The deal would have reduced the number of operators in the UK to three, leaving Vodafone and BT’s EE to compete with the merged O2-Three.