Deutsche Telekom Said to Weigh Scout Classifieds Unit Sale
Stock Chart for Deutsche Telekom AG (DTE)
Deutsche Telekom AG (DTE), Germany’s biggest phone company, is considering a sale this year of its digital classifieds business that may fetch 1.5 billion euros ($2 billion), according to people familiar with the matter.
Deutsche Telekom intends to hire banks as early as this quarter to prepare for a sale or initial public offering of Scout24 Holding GmbH, said two of the people, who asked not to be identified because the discussions are private. The business may attract media companies Axel Springer AG (SPR) and Bertelsmann SE as well as buyout firms, they said. Deutsche Telekom may also look for a partner for Scout24, one of the people said.
A disposal adds to options for Bonn-based Deutsche Telekom, which last month said it was exploring an IPO to help fund expansion of the unit it bought in 2004. Scout24 has 13 million monthly users and operates in 22 countries, according to its website.
“A direct sale may make sense because the IPO market hasn’t been too hot recently and Scout could attract wide interest,” said Wolfgang Specht, an analyst at Bankhaus Lampe KG in Bielefeld, Germany. “It will be a multi-stage process and in the end it’s about maximizing the value of the asset.”
Axel Springer rose 2.7 percent 33.25 euros in Frankfurt for its biggest increase in six months. Deutsche Telekom added 0.7 percent to 9.02 euros.
Andreas Fuchs, a Deutsche Telekom spokesman, declined to comment, as did Axel Springer spokeswoman Edda Fels and Bertelsmann spokesman Christian Steinhof.
Europe’s phone companies are looking to offload Internet and content businesses as they seek to raise money for building high-speed mobile networks. Telefonica SA (TEF) of Spain last year sold its stake in online travel agency Rumbo, while Telecom Italia SpA (TIT) is divesting its television assets in Italy.
“Should I now put more cash into Scout, or should we consider that Scout might be, you know, a self-funding business?” Deutsche Telekom Chief Financial Officer Timotheus Hoettges, who is set to replace Rene Obermann as chief executive officer next year, told investors on Dec. 7. “We might even consider, at real enough prices, an IPO for our Scout entity, which has nicely developed with double-digit growth over the past.”
Axel Springer, Europe’s biggest newspaper publisher, acquired French property-listing website Seloger.com in 2011 to add revenue from digital businesses and reduce the company’s dependence on print assets. Real estate, jobs and automobile classifieds are among more popular websites as readers increasingly get their information from the Internet, eroding a traditional source of revenue for newspaper groups.
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