KPN spurns 'unsolicited' takeover bids by private equity firms

Dutch incumbent KPN, in response to media speculation, said it had knocked back two separate and "unsolicited" takeover bids from private equity firms EQT and KKR.

KPN's top brass concluded that both approaches failed to provide "tangible and material added value" over the operator's recently updated growth strategy, which places emphasis on fiber infrastructure investment in parallel with continued cost-cutting efforts

The Dutch incumbent confirmed that Sweden's EQT, in partnership with Stonepeak Infrastructure Partners, had mounted a takeover bid – although apparently it didn't include an offer price – which it "recently rejected."

Hanging up: KPN is avoiding the calls of would-be suitors who they say have failed to offer 'tangible and material' value.  (Source: KPN)
Hanging up: KPN is avoiding the calls of would-be suitors who they say have failed to offer "tangible and material" value.
(Source: KPN)

No detail was provided on the takeover bid by US-based KKR, although KPN pointedly noted that no discussions or negotiations have taken place with either EQT/Stonepeak or KKR.

EQT not giving up

Despite being spurned by KPN, Reuters reports that EQT still thinks it can persuade the Dutch incumbent to entertain a rethink by enabling more funds for infrastructure investment.

How far this revised plan might be an upgrade on the original EQT/Stonepeak proposal was not made clear.

Reuters quotes "people familiar with the matter" as saying EQT would not demand dividends, and that it would be willing to spend €4 billion (US$4.8 billion) on network investment.

EQT owns the Netherlands' second-largest fiber network, DeltaFiber, and, according to a Reuters source, was nurturing the idea of combining it with KPN's fiber buildout.

Yet KPN already has a plan in place to spend €3.5 billion ($4.2 billion) on fiber rollout over the next three years. Moreover, the operator recently entered into a fiber infrastructure JV with Dutch pension fund APB to accelerate FTTH rollout in rural areas. The JV is slated to invest more than €1 billion ($1.2 billion) over the next five years.

KPN rumor mill

The latest round of KPN M&A speculation stretches back to October when EQT was reportedly considering making an offer. Reuters, the following month, said the Swedish private equity firm tabled a bid that valued the incumbent at around $13 billion.

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KPN is no stranger to takeover bids and speculation. Carlos Slim, the billionaire owner of América Móvil, abandoned his $9.5 billion bid to take control of the operator back in 2013.

In early 2019, it was reported that Canadian investor Brookfield Asset Management wanted to take over the group, but no offer materialized.

KPN suitors will note that they need the backing of both KPN management and the Dutch government if they are to succeed.

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— Ken Wieland, contributing editor, special to Light Reading

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