International telecoms groups Orange Group and Deutsche Telekom (DT) are said to have begun reconsidering the future of their British joint venture EE, according to the Financial Times. It is understood that among the plans being examined is a potential flotation of the cellco next year, which could value it at more than GBP12 billion (USD19.2 billion). However, citing a person with knowledge of the situation, the report notes that a final decision has yet to be made, with other options on the table thought to include a partial sale to a buyer such as a private equity group.
Meanwhile, neither Orange Group nor DT are thought to be keen to divest the UK mobile operator before the end of this year, with the German outfit said to be first focused on resolving the future of its US unit T-Mobile US, while Orange Group is concentrating on the reshaping of its domestic business amid industry consolidation, along with its acquisition of Jazztel in Spain.
A possible listing in 2015 falls in line with comments made earlier this year, with the Financial Times citing previous comments from Orange Group CEO Stephane Richard, who had said: ‘On midterm view, the idea is still to open EE to external investors, which might be through an [initial public offering] IPO … The new chief executive of Deutsche Telekom clearly wants to review this. [But we] have no specific discussion – maybe 2015/16. We need to do something as the 50/50 joint venture may not be an eternal choice for both companies.’ Meanwhile, in June 2014 Orange Group’s chief financial officer Gervais Pellissier was cited as saying that with EE’s parent companies considering reviving plans for a possible IPO after the summer, other scenarios could be examined, depending on the strategies followed by the cellco’s rivals.
As previously reported by CommsUpdate, in January 2014 DT and Orange Group put plans to float their UK joint venture on hold, after concluding that its value would rise in the future as more people adopt higher-margin 4G mobile data packages. ‘The shareholders have both agreed that the best option for value creation is to maintain the current ownership structure [of EE] for the time being, and they look forward to continuing their cooperation in the UK market,’ the two companies said in a statement at the time.