Britain’s EE geared for possible flotation by end 2013

Owners insist potential flotation would free up some cash

The parent firms of Britain’s largest mobile group, EE, have revealed they could soon float part of it off, following similar moves by Russia’s MegaFon and Spain’s Telefonica recently. Gervais Pellissier, deputy CEO of France Telecom which owns EE jointly with Deutsche Telekom, has disclosed an IPO could take place at the end of 2013, although he says the parent companies would remain majority shareholders.The pair have yet to appoint advisors for the process which could see the enterprise given a value of more than £10 billion.

EE, which operates under its own brand as well as Orange and T-Mobile in the UK, recently stole a six month march on rival mobile operators when it was allowed by the regulator Ofcom to introduce its own 4G services using its existing 1800 MHz spectrum.

That, and predicted cost savings of £3.5 billion from the merger of Orange and T-Mobile, has aroused the interest of private equity investors who see EE as a plumb worth picking.

Tom Alexander, former chief executive of EE, has already been in talks with private equity groups such as Apax and KKR about leading a buyout, though EE’s financiers believe a public listing could raise more money.

Meanwhile Mr Pellissier has said that France Telecom would not welcome any attempt to merge its business with Deutsche Telekom, but he acknowledged that politicians had spoken about this.

Elsewhere both MegaFon – owned by Russia’s richest man Alisher Usmanov – and Spain’s Telefonica, have resorted to flotation to raise more funds during tough global trading conditions.

MegaFon is expected to list simultaneously in London and Moscow before Xmas while Telefonica has already raised €1.45 billion ($1.8 billion) by selling shares in its German division.

  • Footnote:  the UK’S fourth-largest mobile operator, 3UK, saw off competition by signing up a million extra customers in the past twelve months, the operator has revealed. It has also announced plans to bolster its current network rather than focus on 4G technology, raising the possibility that January’s auction of 4G airwaves may not raise as much as the government hopes.

About Dave Evans

Dave Evans was a long established commentator on both the IT and cellular industries. His last focus was on share price trends within the sector. He passed away in September [2014].
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