Deutsche Telekom and United Internet are preparing rival bids for German web hosting provider Host Europe Group (HEG) ahead of a 10 October deadline for non-binding offers, sources involved in the process told Reuters.
HEG, one of Europe's largest independent web hosting firms, was put up for sale by private equity firm Cinven before the summer but the process was shelved for a time due to market volatility resulting from Britain's vote to leave the EU. Cinven has now resumed efforts to sell the web hosting firm, which is valued at about EUR 1.5 billion. It wants to receive indicative offers next week, and is hoping to sign a deal before Christmas, the report said.
Deutsche Telekom has teamed up with US private equity fund Hellman & Friedman. It plans to use its own web hosting subsidiary Strato as a platform for the bid. Hellman & Friedman will retain a majority stake in the event of a successful takeover, and Strato will act as a minority investor, one of the sources said. United Internet is working on a bid with buyout fund Warburg Pincus and would take a controlling stake if successful.
Web hosting firm GoDaddy is also considering a bid for Host Europe which would help it gain scale in Europe, one of the sources said. Some buyout funds including Providence, Permira and EQT may also decide to enter the bidding. All the companies declined to comment.
