State exit prompts KPN sale speculation

James Middleton

September 22, 2006

1 Min Read
State exit prompts KPN sale speculation

The Dutch government sold its remaining 8 per cent stake in former state owned incumbent carrier KPN on Friday.

KPN has entered into an agreement to repurchase the shares from the State for a total consideration of approximately Eur800m (£538m), further fuelling speculation that KPN is ripe for takeover.

Rumours that KPN could become an acquisition target began in December, when the Dutch government disposed of its golden share in the company, which allowed it to veto any takeover bids made for KPN. The sale of the golden share removed the government’s protective shield over the operator and left KPN free to accept any takeover offers, without government intervention.

Potential bidders for KPN have not yet stepped forward, although equity firms are thought to be likely suitors. KPN is under pressure from fierce competition in its three markets – the Netherlands, Germany and Belgium – and is undergoing a company wide restructuring towards a multi brand and converged strategy.

On Thursday, KPN said its E-Plus network in Germany is to restructure to better challenge rivals in the German market. E-Plus will eliminate a complete management layer, cutting management positions by almost 40 per cent, or 300 heads.

But the operator expects to expand its sales and retail activities, recruiting more than 350 additional employees to open new shops. E-Plus’ customer facing employees are to increase from some 40 per cent of the workforce now to approximately 70 per cent by the end of 2007.

Earlier this month, KPN’s domestic operation acquired ISP Tiscali Netherlands for Eur255m. Tiscali Netherlands had 276,000 DSL and 126,000 dial up subscribers as of end-June.

About the Author(s)

James Middleton

James Middleton is managing editor of | Follow him @telecomsjames

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