BRUSSELS: Royal KPN NV said it is selling BASE Company to Telenet Group Holding NV for €1.33 billion ($1.42 billion) in cash, allowing it to fully focus on its integrated access strategy in the Netherlands.
The Dutch telecom firm said it would use the money raised from the sale to create maximum value for shareholders, without giving any further detail. It said a further announcement will be made on completion of the transaction.
Our continued good progress is expected to result in a stabilized adjusted [earnings before interest, taxes, depreciation and amortization] Ebitda by end-2015, a growing free cash flow and a growing dividend,” Chief Executive Eelco Blok said.
BASE Company is a mobile business with 3.3 million customers and a service revenue market share of 21% at the end of 2014.
Earlier this month KPN said it was exploring “all of its options” for BASE, its Brussels-based subsidiary.
The statement followed reports in Belgian media that local cable operators Telenet and Voo were preparing a joint bid for the business.
Tom Muller, an analyst with Theodoor Gilissen Bankiers , said that the price was higher than expected. One possible way for KPN to use the money would be to reduce debt, he added.
Mr. Muller said KPN was becoming “lean and mean” and a pure Dutch player. KPN sold its German mobile subsidiary E-Plus to Telefónica for €5 billion in cash in 2014.
The European telecom industry is expected to consolidate further in the coming years, Mr. Muller believes. Large incumbents in Germany, France and Spain won’t wait until players from smaller countries such as the Netherlands make a move.
