KPN, Deutsche Telekom End Talks On O2 Bid"

AMSTERDAM -(Dow Jones)- Telecommunications operators Royal KPN NV (KPN) and Deutsche Telekom AG (DT) Tuesday said they have ended talks on a bid for wireless operator O2 PLC (OOM.LN).

The statements come in response to recent media reports saying the two companies held talks on a possible bid for 02.

Deutsche Telekom and KPN had discussed acquiring and then carving up O2, with KPN buying the German operation of the British firm and Deutsche Telekom keeping the remainder.

One media report estimated a bid for O2 could value it at up to GBP14 billion.

KPN said DT first approached it to consider making a bid for O2.

KPN said it remained confident about its new strategy in Germany which was to accelerate organic growth through a "targeted multi-brand" strategy.

European incumbents have been looking to bolster their activities, with Deutsche Telekom, KPN and France Telecom SA (FTE) all unveiling acquisitions to strengthen their wireless activities in recent months.

For Deutsche Telekom, buying O2's U.K. activities would have strengthened its wireless arm in the U.K., where it is suffering from weak profit margins.

KPN has long coveted O2's German business, an acquisition that would give its unprofitable E-Plus unit more scale and heft to take on market leaders Deutsche Telekom and Vodafone Group PLC (VOD).

-By Stefan Simons, Dow Jones Newswires; 31 20 6260770; stefan.simons@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 16th August 2005