KPN cancels Belgian BASE sale over 'unsatisfactory' offers

KPN's plans to sell its Belgian mobile subsidiary, BASE, sputtered briefly into life last week before stalling after bidders failed to meet the Dutch telco's price expectations.

KPN said in a brief statement that halted the sale because the operator believed the non-binding offers it received were "unsatisfactory."

The bids for the mobile-phone unit reflected the "current difficult financial market conditions and didn't take Base's strong position and outlook into account," KPN said.

KPN clearly had high expectations for the deal, with some reports suggesting a price tag of €1.8 billion.

The situation looked reasonably positive when reports last week said five non-binding offers had been received from De Persgroep, cable company Telenet and private equity firms Blackstone, Providence and Cinven.

However, the first wobble came on Monday this week when Telenet ruled itself of a bid for BASE in a move that was widely regarded as the death knell for the sale. Reuters noted that Telenet was seen as the prospective buyer that would have been able to generate the most cost savings from the BASE deal. The cable company is still planning to enter the Belgian mobile market by means of an MVNO agreement with Mobistar, Reuters added.

The cancellation of the BASE sale will be welcome news to least one interested party: América Móvil. The Mexican operator controlled by Carlos Slim that has acquired a 28 per cent stake in KPN, had opposed the sale of BASE and wanted to keep the Belgian company under the KPN umbrella.

KPN is still faced with finding ways to reduce its high debt, however. Further cuts in its dividend or rights issues look to be high on the agenda, analysts suggest, but KPN later told Reuters it is not considering either of these measures.

For more:
- see this Bloomberg article
- see this Reuters article
- see this separate Bloomberg article
- see this FT article (sub. req.)

Related Articles:
Report: Bidders line up for KPN's Belgian BASE unit
Report: KPN's BASE unit attracting interest from buyers
Report: KPN angers América Móvil with push to sell BASE subsidiary
Report: Telefónica, KPN prep sales of German assets
Analysts: América Móvil may push KPN to invest more in networks
América Móvil secures 27.7% stake in KPN, plans long-term partnership

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