KPN exploring 'strategic options' for Belgian unit

KPN said it is reviewing its strategic options for its Belgium-based mobile unit BASE. KPN made the announcement, which could clear the way for a sale of BASE, after the BASE reported a 0.5 per cent drop in revenues last year to €781 million.

News that KPN was actively considering the disposal of BASE pushed shares in the Dutch telecoms firm 6 per cent higher, according to Reuters. Analyst Siddy Jobe at Bank Degroof in Brussels told Reuters that a price of €1.8 billion made sense as the sale is unlikely to attract bids from other mobile phone operators in Belgium due to competition concerns.

"There would be some interested parties, but it's not that there are 10 strategic partners who really would like to have and really need that asset," he said.

KPN--which saw its Dutch fourth-quarter mobile service revenues decline by 13 per cent, could--according to a UBS note carried by Dow Jones Newswires, use the proceeds from the sale of BASE to reduce debt or conduct a share buyback. UBS valued BASE at €1.67 billion.

KPN sold its French mobile unit late last year and there have been persistent rumours that it was considering the sale of its German operations E-Plus, a key growth engine for KPN.

Overall, BASE is a relatively small part of KPN's business empire generating only 6 per cent of sales and 5 per cent of EBITDA. By comparison, its German unit E-Plus contributes 24 per cent of sales and 26 per cent of EBITDA.

Separately, KPN announced that it was abandoning its planned acquisition of the regional Dutch cable operator Caiway, which offers TV, broadband and telephony services. The company said it was withdrawing its bid following concerns raised by the Dutch competition authorities that the purchase of Caiway would lead to KPN becoming a dominant provider in certain areas, according to European Communications.

For more:
- see this Reuters article
- see this Dow Jones Newswire article
- see this European Communications article
- see this Financial Times article (reg .req.)

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