France Telecom: EE could IPO next year, as private equity interest climbs

France Telecom (FT) CEO Stephane Richard said the company is considering an initial public offering of EE next year, adding that "many" private equity firms have expressed interest in buying part of the UK operator, which FT jointly owns with Deutsche Telekom, according to Bloomberg.

Richard quashed any idea of selling EE, stating: "We want to keep control of the asset, and so do the Germans. That said, there is a possibility that we can give ourselves some financial headroom by opening EE's capital to a minority shareholder or through an IPO, but we haven't yet decided."

Speaking at an industry conference in Montpellier, France, the CEO told Bloomberg, "We don't need cash today so there is no set deadline to decide on EE. We won't need to arbitrate between assets to solve any cash problems for years to come."

Separately, Gervais Pellissier, deputy chief executive of FT, told the Financial Times there could be an IPO of EE at the end of 2013. However, FT has yet to appoint advisers for an IPO, which the report said FT views as more likely than a sale to private equity. Pellissier also confirmed that there is no urgency for an IPO or sale.

"There is clearly a long-term commitment of the two shareholders even if there might have been some uncertainties in the past whether we would stay or not," Pellissier told Reuters.

These comments from senior FT execs will trigger significant interest among both potential investors and advisors given that analysts have rated the enterprise value (equity plus net debt) of EE at more than £10 billion, according to the FT.

A former EE CEO, Tom Alexander, was at the centre of speculation in June over putting together a buyout deal for EE backed by private equity firms including KKR, CVC and Providence. However, the plan gained little traction sources told Reuters at the time.

For more:
- see this Bloomberg article
- see this Financial Times article (sub. req.)
- see this Reuters article

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