E& denies United Group talks but is eyeing market opportunities

The United Arab Emirates-based telecoms operator made a statement to that effect to the Abu Dhabi Securities Exchange after Bloomberg claimed it was looking at buying United Group, whose operations in eastern Europe could come with a price tag around the €8 billion mark.

"In response to media reports speculating on e&'s potential acquisition of United Group BV, we confirm that e& has not entered into any negotiation or agreement in respect of United Group BV's assets," the telco said, in a perfunctory statement.

"However, consistent with our corporate strategy, e& continually reviews relevant market opportunities with the objectives of maximising shareholder value," it added.

There are a couple of points to highlight in that very short statement.

Firstly, the Bloomberg report – stemming from the usual unnamed sources familiar with the situation – only claimed that e& has been evaluating a move for United Group, not that it is actually in talks with the telecoms and media outfit. That being the case, e&'s statement is not a denial at all, but merely a statement of fact; no talks are ongoing. We're still none the wiser on whether or not it is mulling an acquisition though.

Secondly, while e&'s comment about continually looking for opportunities is a pretty standard caveat in stock exchange announcements of this kind, it does suggest that e& is giving itself a get-out should it be in a position to have to disclose contact with United Group, or indeed any similar acquisition target, in the near future.

The story hasn't come out of nowhere, in that United Group's private equity owner BC Partners is working with advisors to explore a sale; so say Bloomberg's sources, at least. And as one of a number of Middle Eastern telecoms operators looking to expand to European shores, e& is an obvious candidate, should the business formally go on the block.

It made its first foray into Eastern Europe in August when it inked a deal worth up to €2.5 billion to take control of PPF Group's telecoms operations in four markets in the region: Bulgaria, Hungary, Serbia, and Slovakia.

United Group also has telecoms businesses in Bulgaria and Serbia – which could raise competition issues for e& – as well as in Bosnia & Herzegovina, Croatia, Greece, Montenegro, and Slovenia. However, its parent is not necessarily looking to sell the businesses as a single lot. The newswire's sources notes that BC Partners is at the early stages of working out what to do and could end up selling United Group piecemeal to multiple buyers.

The firm is expected to kick off a formal sale process next month, they said, adding that it is likely looking for around €8 billion in total for the businesses.

To put that in context, United Group posted full-year results last week which showed 7% on-year growth in both revenues and EBITDA to €2.8 billion and €988 million respectively. Amongst other things, the firm pointed to strong postpaid mobile customer growth across key markets.

Clearly, these are pretty strong businesses, and should they go up for sale, e& may well be not the only interested party.