News
Operator reportedly running the numbers after Ronan Dunne is approached by private equity firms.
O2 UK is mulling a possible management buyout worth £8.5 billion (€10.78 billion) in the wake of its failed sale to 3UK parent CK Hutchison.
The Telegraph reported on Sunday that CEO Ronan Dunne has been approached by several private equity firms about a debt-funded deal, adding that the mobile operator has begun exploring its feasibility.
Unnamed investment bankers cited in the report noted that the £8.5 billion valuation is lower than the £10.25 billion that CK Hutchison was prepared to pay because the latter deal would have resulted in significant cost savings.
Speculation about O2’s future has been rife since the European Commission decided to block CK Hutchison’s plan to merge it with 3.
Even before Brussels announced its decision, Mike Fries, CEO of Virgin Media parent Liberty Global, said "it would be strange" if his company didn’t consider a bid for O2.
The Financial Times reported last week that former EE chief and Virgin Mobile founder Tom Alexander is in talks with private equity firms about a possible bid.
Meanwhile, sources cited by Sky News claim that Apax Partners, CVC Capital Partners and KKR are considering a joint offer worth £10 billion.
Another option said to be on the table is a possible flotation. O2 parent Telefonica was banking on the Hutch deal to pay off some of its €50.21 billion debt.
In addition, according to Sunday’s Telegraph report, satellite TV provider Sky is open to taking a stake in O2 but is not interested in a full takeover.
