By Eyk Henning
Deutsche Telekom AG (DTE.XE) is considering selling a majority
stake in its online advertising business Scout 24 as private equity
suitors ask for more influence in the unit, according to people
familiar with the matter Friday.
Germany's largest telecom operator is likely to exclude
financial investors Apax Partners and potentially TPG Inc. from the
auction due to disagreement over the degree of influence in Scout
24.
Such a move would leave private equity firms Silver Lake
Management L.L.C, EQT and Hellman & Friedman L.L.C to run for
the unit in a transaction that could be valued up to around 2
billion euros ($2.76 billion) in total.
While Deutsche Telekom originally planned to sell a 30% stake in
Scout 24 and offered a vendor loan for the transaction--meaning it
provides the debt financing for the buyer--it has now opened the
door for external debt financing, people familiar with the matter
say. Such a move is a hint that it is willing to sell more than
half of the unit and potentially de-consolidate it.
Bankers say that any private equity buyer could finance buying a
stake with debt of up to 7 times of its earnings before interest,
taxes, depreciation and amortization of likely slightly above
EUR100 million this year.
Private equity firms are scrambling to find potential targets as
the deal flow has been rather subdued.
The private equity firms name declined to comment or couldn't be
reached immediately.
A spokesman for Deutsche Telekom declined to comment.
Write to Eyk Henning at eyk.henning@wsj.com
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