D.Telekom shares up after Blackstone buys stake
FRANKFURT, April 24 (Reuters) - German state bank KfW is to
sell part of its stake in Deutsche Telekom <DTEGn.DE> to U.S.
private equity firm Blackstone for 2.68 billion euros ($3.3
billion), boosting Telekom shares nearly 4 percent.
KfW [KFW.UL] said Blackstone agreed to buy 191.7 million
shares or 4.5 percent of Deutsche Telekom and German Finance
Minister Peer Steinbrueck, a Social Democrat, said Blackstone's
move signalled a vote of confidence from international investors
in Germany's biggest telecom group.
This view was in marked contrast to that expressed last year
by the head of the Social Democrats, who described some foreign
investors as "locusts" who devoured German companies and
destroyed jobs.
"We are committed to being long-term investors in the
company and our intention is to support the company and its
management - particularly at the supervisory board level - in
executing a strategy of long-term value creation," said
Blackstone Chief Executive Stephen Schwarzman in a statement.
The deal is part of KfW's strategy of broadening the
investor base in its privatisation of Deutsche Telekom.
A financial source told Reuters on Monday that Blackstone
was likely to name Lawrence H. Guffey to Deutsche Telekom's
supervisory board. Guffey is senior managing director in charge
of Blackstone's media and communications investments in London.
Deutsche Telekom signalled it was happy to welcome
Blackstone on the board, which is tasked with overseeing
executive management.
"Blackstone's offer to contribute its expertise as a leading
global telecommunication investor also at the level of the
supervisory board is equally appreciated," KfW said.
Blackstone is paying 14.0 euros per share for the stake or a
2.6 percent premium compared with Friday's closing price, KfW
said.
Deutsche Telekom shares were the biggest gainer on Germany's
large-cap DAX <.GDAXI> index, rising 3 percent at the open in
Frankfurt. They were trading up 3.7 percent at 14.15 euros by
0755 GMT, bucking a 0.4 percent decline in the DAX.
"It is very positive that there is interest from the foreign
camp," said Activest analyst Markus Steinbeis. "At the current
price the purchase is extremely interesting."
KfW agreed not to make further sales of its remaining 17.3
percent stake in Deutsche Telekom for a period of one year.
KfW and the German government, which holds a 15.2 percent
stake in Telekom, remain the company's largest shareholders.
Blackstone committed itself to a two-year lock up period on
its shares of the telecoms company, the statement said.
"Due to the broadening of the shareholder base and the fact
that KfW will not sell additional shares in the next 12 months,
Deutsche Telekom shares should benefit from the announcement,"
said analysts at equinet in a note to clients.
Equinet has a target price of 15.0 euros for Deutsche
Telekom shares.