BERLIN — German telco Deutsche Telekom confirmed Tuesday that it has elected to sell off only a 35% stake in its cable systems — a move that is expected to deter new investors from developing the systems to rival DT’s business.
DT had said previously it would sell a 75% stake in the nine regional cable systems currently on the block.
The cable gatekeeper now plans to float around 40% of the nine regional systems within two years of selling off the 35% stakes to investors who will also be given management of the cable systems. DT will retain a 25% stake in the systems.
Coin needed for upgrade
Large investments are needed to upgrade the networks to make them Internet-friendly, meaning that the reduced shares available may put some investors off.
A spokesman told Daily Variety that DT still hopes to have sealed one or two regional deals by the end of the year.
“We have always said we were considering floating,” he said. “No voting rights will be available until the stock is floated, meaning that the main investor (in the 35% stake) will determine what happens with the systems.”
Bidders include GE Capital, the financing arm of General Electric, which has put in for all nine regions; German operator Primacom, which is bidding for four; a consortium of German banks; Dutch-based cable group United Pan European; Bertelsmann; and Microsoft.
Global mogul Rupert Murdoch has expressed an interest in joining other consortia.