Report: Orange targeting €900M bonanza from Dominican Republic exit

Orange is mulling the sale of its Dominican Republic business in a deal that could fetch up to €900 million ($1.18 billion) based on the current enterprise value, according to a Reuters report.

The report, citing unnamed sources familiar with the matter, added that the France-based operator is currently talking to several banks and is expected to appoint a financial adviser in the next few days. Orange Dominicana provides mobile phone and Internet services to retail and business customers, and has a 38.4 per cent share of the mobile market. It has also launched LTE services in the market, according to previous reports from Orange.

Orange declined to comment, according to Reuters.

Potential interested parties reportedly include Millicom, Jamaica's Digicel, Cable & Wireless Communications and private equity firms in the United States and Latin America, although none of the companies has commented on the matter, including Orange.

Local players would also find Orange Dominicana to be a good strategic fit, according to analysts, although Viva and Tricom would be the only likely contenders in view of their low market shares of 7.4 per cent and 3 per cent respectively. The largest player on the market is América Móvil's Claro, which has a 51.2 per cent share.

Orange Dominicana recorded 2012 revenue of €451 million, and increased its subscriber base by 5.4 per cent in the first quarter of 2013, which was faster than in 2012, Reuters added.

"At 2 times sales, the enterprise value would increase to €902 million. I doubt Orange could get more than that, so a sale would probably be in the range of €675 million to €900 million," MorningStar analyst Allan Nichols told Reuters.

Orange is generally looking at ways to reduce its debt and fund strategic acquisitions in potential growth markets.

For more:
- see this Reuters article

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