EE IPO talks back on as Orange and Deutsche Telekom consider options for £12bn disposal
The owners of EE, the UK’s largest mobile network company, are believed to be back in talks for either a float or sale of the business that could value it at up to £12bn.
Orange and Deutsche Telekom, which each own half of EE, were considering strategic options for the business last year before deciding to put plans on ice.
With talks restarted, a deal could soon be back on the table.
In June, EE’s chairman Gervais Pellissier told reporters that the company had been instructed to “position EE either on dividend or return or growth,” over the following six months with a decision on IPO plans coming “when we return from vacation”.
The two companies are keen to raise cash, with Deutsche Telekom having to invest in infrastructure in Germany and the US and Orange facing an increasingly competitive French market.
While the talks, first reported by Bloomberg, are said to have restarted between the two owners, no decision is expected before the end of the year.
Even though it remains the preferred option, a float is unlikely in this year’s current volatile stock markets.
EE chief executive Olaf Swantee downplayed an imminent IPO as recently as last week, speaking to City PM
“At the moment, there are no IPO plans, it’s not even putting it on ice and then bringing it back, there are just no plans,” he said.
Swantee declined to discuss any further details of an IPO, adding that any decision would be for EE’s shareholders to make, although if the company were to float he would likely lead the company to market.
“Our shareholders are happy with our business and its performance, we have met our objectives and our targets. It’s not an urgent need to do something; our business works and we have a good financial model,” he said.
EE, which is also among the nominees for Most Innovative Company at the City PM Awards next month, is on track to meet a 2014 target of raising its earnings margin to 25 per cent.
“We are definitely not over-leveraged, our debt-to-Ebitda (earnings before interest, taxes, depreciation, and amortisation) ratio is far below two, so there’s really no urgent need for a lot of capital. We’re in a good position,” added Swantee.
EE, Orange and Deutsche Telekom all declined to comment last night.