French and German owners of Britain’s largest mobile operator, Everything Everywhere, are not interested in selling and have enough cash to invest in the business, France Telecom’s chief executive said yesterday.
Investment banking sources had told Reuters last week that former chief executive Tom Alexander approached private equity groups six months ago to gauge interest in an £8bn offer for the France Telecom and Deutsche Telekom joint venture.
Investment banking sources said firms Alexander approached included CVC, KKR and Providence, but he gained little traction in such difficult funding conditions.
“We are happy with the joint venture,” France Telecom chief executive Stephane Richard said. “The Germans are also happy to be there, they do not wish to sell. We do not wish to sell either. If we receive an offer that makes sense, of course we will look at it. But that does not mean we will accept it.”
France Telecom's Orange joined forces with Deutsche Telekom’s T-Mobile in 2010 to become the biggest operator in the competitive British market, with more than 27m customers. The group pledged £3.5bn of cost savings, largely by creating one network and taking down excess towers.
The synergies have taken time to come through and the group is only now starting to gain traction – it also announced an extra dividend of £250m yesterday.
A private equity deal of the size of Everything Everywhere would run against the trend in a market focused on deals under a billion pounds because banks have cut lending.
One person familiar with the thinking of private equity groups this week said it would be near impossible to finance an Everything Everywhere deal in the current market.