Following in the footsteps of Russia’s MegaFon, it’s claimed
Britain’s largest mobile network EE is being primed for flotation at the end of this year in what could prove to be London’s biggest stock market listing in over two years.
If the IPO succeeds it would raise billions for owners Deutsche Telekom and France Telekom, both of whom are in need of a cash injection to invest in expanding their home networks, acquire new spectrum and pay off debts.
EE, formerly known as Everything Everywhere, only recently merged its two subsidiary brands T-Mobile and Orange though it has led to a tenth of stores being chopped and widespread job losses. The operator has also launched Britain’s first high speed 4G mobile network for its 27 million customers, though rivals such as Vodafone, O2 and Three are soon likely to catch up once the government’s current 4G spectrum auctions are complete.
Meanwhile EE’s owners are said to be close to appointing advisors for the IPO, though the pair will still retain some control. But it’s reckoned that floating just a quarter of the firm could raise as much as £2.5 billion.
France Telecom and Deutsche Telekom insisted in a joint statement that they remained “long term partners in EE”.
“Deutsche Telekom and France Telecom are very confident in the management strategy which aims to strengthen EE’s leading position in the UK, leverage on the largest 3G network and first 4G network roll-out, further progress the integration of T-Mobile and Orange and increase the profitability of this business in the coming years.
“In that respect Deutsche Telekom and France Telecom have decided to conduct a strategic review on the asset and consider different options with an IPO as the preferred option. We expect to conclude the strategic review in the course of 2013. We do not comment on specific speculation.”
Only last November [2012] MegaFon, Russia’s second largest mobile phone company by customers and owned by the country’s richest man Alisher Usmanov, was also floated on the London Stock Exchange, making the part IPO the largest new capital raising by a teleco in London since Orange in 2001.
The latest news of EE’s flotation comes amid a flurry of speculation about mergers and acquisitions in the industry.
Just over a two weeks’ ago EE was rumoured to be the target of a takeover by US giant AT&T which desperately needs to expand beyond its home shores.
Another takeover target could be Britain’s O2, owned by Spain’s Telefonica and which only last month was similarly the subject of rumours that it might be part-floated or sold to help shrink its parent firm’s debts.
* The UK’s fourth-biggest mobile network company, Three, will not be charging a premium for its 4G services when they become available later this year. It says that unlike EE, which is charging customers roughly £5 a month more than for equivalent lower-speed contracts, it will offer the faster speeds as standard rather than creating separate price plans for 4G and 3G.
