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Blackstone’s Deutsche Telekom Stake Rises 13% With T-Mobile Deal

Blackstone Group LP Founder and Chairman Stephen Schwarzman
Blackstone Group LP founder and Chairman Stephen Schwarzman. Photographer: Simon Dawson/Bloomberg

March 23 (Bloomberg) -- Blackstone Group LP, the world’s biggest private-equity firm, inched closer to breaking even on its 5-year-old stake in Deutsche Telekom AG with the phone company’s agreement to sell T-Mobile USA to AT&T Inc.

The $39 billion transaction, announced March 20, sent shares up 13 percent in the past two days, boosting New York-based Blackstone’s 4.4 percent holding by about 230 million euros, according to data compiled by Bloomberg. The firm owned 191.9 million shares of Bonn-based Deutsche Telekom as of Oct. 13.

The Blackstone stake still trades at 23 percent less than the 14 euros-a-share the firm paid in March 2006, at the height of the private-equity boom. The purchase of a minority interest in a publicly traded company was a departure from Blackstone and its buyout competitors’ play book of taking companies private or buying them outright to more effectively change them and eventually reap profits.

Peter Rose, a spokesman for the firm, declined to comment.

Blackstone’s shares rose 5.5 percent in two days of New York Stock Exchange composite trading as markets rebounded from last week’s selloff.

The stock has gained 24 percent this year as the firm invests a new buyout fund. Private equity stood as its third-largest business by revenue last year, reflecting founder and Chairman Stephen Schwarzman’s strategy of expanding beyond traditional leveraged buyouts.

Deutsche Telekom rose 13 cents, or 1.2 percent, yesterday in Frankfurt to 10.80 euros. Blackstone gained 9 cents to $17.54 in U.S. trading. The private-equity firm’s shares trade at 43 percent below their 2007 initial public offering price of $31 a share.

To contact the reporter on this story: Jason Kelly in New York at jkelly14@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

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