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France Telecom May Sell Stake in UK Joint Venture to Private Investors

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France Telecom says that it has been approached about selling a portion of its 50% stake in the UK based mobile network EE (formerly Everything Everywhere).

EE is 50:50 joint venture between France Telecom and Deutsche Telekom, and has recently decided to drop their Orange and T-Mobile brands in favour of its own EE brandname.

France Telecom's Chief Executive Officer Stephane Richard told Bloomberg News that the company had received approaches from several private equity investors seeking to take a minority stake in the company.

"We want to keep control of the asset, and so do the Germans," Richard said. "That said, there is a possibility that we can give ourselves some financial headroom by opening EE's capital to a minority shareholder or through an IPO, but we haven't yet decided."

"We don't need cash today so there is no set deadline to decide on EE," Richard said. "We won't need to arbitrate between assets to solve any cash problems for years to come."

There were rumours earlier this year that EE's former CEO, Tom Alexander had spoken to a number of private equity groups, including KKR, about a US$13-$16 billion buyout, but was unable to develop the talks.

It has been generally accepted that EE has been keen to gain its independence from its 50:50 shareholders, France Telecom and Deutsche Telekom and last year raised independent debt to repay part of its USD2 billion worth of shareholder loans.

France Telecom's Chief Financial Officer, Gervais Pellissier said earlier this year that the company would consider floating a stake in the joint venture if the opportunity presented itself. Deutsche Telekom was also rumoured to be mulling a sale earlier this year, although that was said to be at a very early stage.

On the web: Bloomberg News

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Tags: france telecom  deutsche telekom  ee  everything everywhere  UK