Versatel Sinks as KKR Offers to Buy German Phone Company for $420 Million

KKR & Co. plans to make a cash offer for Versatel AG (VTW) in a deal giving the German phone and Internet company’s stock a value of at least 295 million euros ($420 million). Versatel slumped the most in more than two years in Frankfurt trading.

VictorianFibre Holding GmbH, a holding company controlled by funds advised by KKR, will offer no less than 6.70 euros a share. Controlling shareholders Apax Partners LLP, Cyrte Investments BV and United Internet AG (UTDI), who together hold about 92 percent of Versatel, agreed to sell their shares at 5.50 euros a share, Versatel said in an e-mailed statement today.

“The majority shareholders have agreed on what seems a comparably low valuation which is likely to reflect the absence of a strong near-term interest from other potential bidders,” said Hannes Wittig, an analyst at JPMorgan Chase & Co.

Versatel, which competes with Deutsche Telekom AG (DTE), fell 15 percent to 6.80 euros at 9:43 p.m. in Frankfurt, after rising 19 percent yesterday. The stock has gained 38 percent this year, valuing the company at 298 million euros.

United Internet slipped 0.3 percent to 13.53 euros.

Versatel, which is being advised by Bank of America Merrill Lynch and Latham & Watkins, said the offer is expected to close in the second half of 2011. The deal is subject to regulatory approval in Germany, it said.

To contact the reporter on this story: Maaike Noordhuis in Amsterdam at mnoordhuis@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.