Former Boss Mulls Everything Everywhere Takeover

Tom Alexander, former boss of Everything Everywhere, is believed to be preparing an audacious bid with private-equity groups to take over the network, formed by the merger of Orange and T-mobile in the UK.

The Financial Times reports he has held discussions with groups such as KKR and Apax about an acquisition since February. Alexander presided over the creation of the company, which was formed when T-Mobile and Orange merged in July 2010.

Possible interest

Parent companies Deutsche Telekom and France Telecom have been contacted about a possible deal, with the former reportedly interested given that it is offloading its non-core businesses, but the latter had only recently been discussing the possibility of an initial public offering.

However it has been suggested that both would welcome the money given the need to invest in next-generation fixed and mobile networks, while Everything Everywhere will need funds to bid for spectrum in the upcoming 4G auction later this year. Last November, the network announced that it had successfully refinanced its £875 million debts owed to its parent companies with a new loan and credit facility.

Analysts have said that a takeover could cost as much as €8 billion (£6.45bn) but a deal would take a long time to complete.

“Everything Everywhere is the UK’s largest communications company, running two of Britain’s biggest brands and with more than 27 million customers,” an Everything Everywhere spokesperson told TechWeekEurope. “We have a clearly articulated, five-year plan for growth under the ownership of our shareholders France Telecom and Deutsche Telekom, and we are delivering on that plan.”

Close ties

“Our shareholders continue to invest in our business committing to £1.5bn in investment in our network over the next three years,” they added. “We would not comment on any possible future shareholder structure of our business.”

KKR also said that it “does not comment on rumour or speculation”

The joint venture is apparently seen as short-term by many brokers, but there have been a number of moves designed to encourage closer integration between Orange and T-Mobile.

Everything Everywhere recently completed its Smart Signal Project, which allows customers to seamlessly switch between the two brands’ 3G networks, while it is also going to invest £50 million in its customer service operations.

It has also been granted provisional approval to launch a 4G network on its existing spectrum ahead of the 4G auction, a move which has infuriated its rivals.

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