KPN picks good time to sell Base

Commentaar Mobiel België 30 JUL 2012
KPN picks good time to sell Base

Base has 4.41 million subscribers and a market share based on revenues of around 19 percent. Only around 77 percent of the customer base is considered active, and 81 percent use prepaid. As a result, ARPU is relatively low (EUR 14, compared with EUR 23 at KPN in the Netherlands) and only a limited number of the subscribers use data services (24%). Base is estimated to be worth around six times annual EBITDA this year, equal to around EUR 1.8 billion. 

Given that Base currently has a higher valuation than parent company KPN (around 4.5x), the proceeds of its sale can go to debt reduction and strengthening KPN's balance sheet. Net debt is currently 2.6 times EBITDA, and KPN aims for a range of 2.0-2.5. Assuming proceeds of EUR 1.8 billion are devoted completely to debt reduction, the ratio would fall to 2.4. 

Given that Base is relatively small and still has no LTE strategy, a sale is an obvious choice. As the number-three player in Belgium, Base will be attractive for Telenet and possibly also De Persgroep, which is not averse to takeovers in new sectors (it was earlier a bidder for broadcaster SBS Nederland, before losing out to Sanoma). 

Categories:

Mobiel

Companies:

KPN,  Jim Mobile,  Telenet,  Iliad,  Liberty Global,  Wind Telecom,  BT

Countries:

België

Tags:

M&A buyouts & divestments

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