Canada’s Brookfield Asset Management is mulling an offer for Dutch carrier KPN, Bloomberg reported, citing sources. The asset manager is talking with Dutch pension funds PGGM and APG about partnering on the bid. The company had a market value of EUR 10.6 billion at market close on 30 January, before reports of the talks came up. The sources noted however that Brookfield has not approached KPN itself yet and that the process is at a very early stage. It may not even yield an offer, they added. The report pushed KPN shares sharply up on 31 January. The Dutch carrier declined to comment on the rumours.
KPN has been the target of takeovers before. The company in 2013 refused an offer from America Movil, one of the Dutch company’s largest shareholders. America Movil still had a stake of 16 percent in KPN according to its last filing in September. To stop the acquisition, an independent foundation was set up to protect the interests of KPN stakeholders. The foundation temporarily took about half of KPN shares in order to block America Movil’s move. The Dutch government later put into motion a law to prevent the acquisition of key Dutch telecom and ICT companies. The bill was announced in April 2018 but no further information has yet been given on the matter.
KPN recently reported its fourth quarter revenues down 1.1 percent, with higher revenues from bundled consumer services and Professional Services unable to offset lower revenues from traditional services and mobile. The adjusted EBITDA rose 1 percent on the back of cost savings.
KPN becomes a local player
Under Eelco Blok, the former CEO before Maximo Ibarra, KPN sold its international units. E-Plus went to Spain’s Telefonica in 2013 while Belgium’s Base went to Liberty Global unit Telenet in 2016. KPN became a local player with a lot of money. The operator received EUR 5 billion in cash for German mobile unit E-Plus, plus a 20.5 percent stake in the newly formed Telefonica Deutschland. The sale of Base generated EUR 1.2 billion.
Since the sale of its international activities, KPN has only made a limited number of acquisitions on the Dutch market, mainly to increase its position in the business telecom and ICT market. New CEO Ibarra is putting the company’s focus more on small purchases in the Netherlands.
Brookfield is an experienced infrastructure investor and recently bought AT&T’s data centre operations for USD 1.1 billion. The company has also invested in telecom towers and other utilities infrastructure. APG and PGGM are two of the largest asset managers in the Netherlands, working on behalf of the civil service pension funds and well as other large investment funds.
