Rumour Mill: Deutsche Telekom mulls selling Everything Everywhere stake

Deutsche Telekom (DT) is weighing its options to sell its 50 per cent holding in Everything Everywhere (EE), the UK mobile operator it jointly owns with France Telecom (FT), according to a Bloomberg article.

The report which cited unnamed sources familiar with the matter, said the move would lead to DT exiting the UK mobile market. However, the report noted that any decision is unlikely until later this year as EE pushes ahead with a drive to improve operational performance. DT would look to sell off its EE stake to recoup the cash it was intending to receive from the sale of T-Mobile USA to AT&T, which collapsed in December.

According to Bloomberg, DT has not yet appointed investment banks or other advisers to help structure a deal. The company has rebutted the suggestion that it plans to sell its stake, with a DT spokeswoman telling Bloomberg that the operator has a "long-term commitment" to the U.K. market and that its venture is "competing successfully."

FT may buy out its German partner's stake or persuade a third party--a group of private-equity firms--to make an outright bid for all of EE, according to Bloomberg. Robin Bienenstock, an analyst at Sanford C Bernstein in London, also suggested that an IPO of part or all of EE may be a route forward.

The company could be valued at around €12 billion based on a multiple of about seven times its EBITDA figures, according to analyst Nick Brown with the investment bank Espirito Santo.

DT had previously stated that it would use the proceeds from the failed $39 billion (€29.7 billion) bid by AT&T to acquire T-Mobile USA to cut its debt by €13 billion and repurchase €5 billion of its own shares. After the deal collapsed, AT&T agreed to pay a breakup fee to DT of €4.57 billion, which included spectrum and a roaming deal.

For more:
- see this Bloomberg article

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