Time is ripe for private equity bosses to get their dosh back
UK mobile phone retailer Phones 4U could be floated in London later this year in a move that would put it on a par with its listed high street rival, Carphone Warehouse. Phones 4U, founded by entrepreneur John Caudwell (who sold it for £1.5 billion in 2006), is currently in the hands of private equity group BC Partners. But with equity markets generally buoyant and Carphone’s own shares rising by a third in the past year, Phones 4U’s owners are now contemplating getting their money back with a £1 billion IPO possibly as soon as this autumn.
The move could value Phones 4U, which has more than 500 stores across Britain, at up to £1 billion and give its owners an opportunity to exit the retailer earlier than expected, having bought the business just three years ago for about £700 million.
Like its arch rival Carphone that only this week reported a 3 per cent rise in Q3 profits, Phones 4U has benefited from the boom of smartphones and tablets aligned with the steady adoption of more lucrative 4G contracts among customers.
But the mobile market, renowned for its volatility, could easily change again given that the main mobile operators are less happy to rely on third-party phone retailers to woo customers.
Three, the Hutchison Whampoa-owned British group, pulled out of third party stores before Christmas to focus on its own retail efforts, while Vodafone has similarly questioned the wisdom of paying another company to sell its phones.
* Footnote: Embattled BlackBerry has been given a helping hand by American’s Pentagon after it confirmed that 98 per cent of smartphones and tablets to be hooked up to a high-security network will be manufactured by the embattled Canadian phonemaker.