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KPN Said to Near Sale of Phone Towers to American Tower

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Nov. 6 (Bloomberg) -- Royal KPN NV, the Dutch phone company partly owned by Mexican billionaire Carlos Slim, is nearing an agreement to sell its German mobile-phone towers to American Tower Corp., according to people familiar with the matter.

American Tower has won the bidding against Swedish private-equity firm EQT Partners AB and the group of Antin Infrastructure Partners and TDF Group, said the people, who asked not to be identified because talks are private. The U.S. owner and operator of wireless broadcast sites, based in Boston, may pay between 300 million euros ($383 million) and 400 million euros, they said.

“KPN can certainly use the cash, as they’re taking part in the Dutch spectrum auction, and owning these towers is not necessarily part of their core business,” said Frank Claassen, an analyst at Rabobank International.

Final negotiations are ongoing and could still fall apart, with a deal potentially announced by next week, said the people. KPN spokesman Stefan Simons declined to comment and officials at American Tower, EQT and Antin Infrastructure did not immediately return calls for comment.

KPN, which has been selling mobile towers since 2008, agreed last week to sell part of its Dutch mobile towers to Indonesia’s Protelindo as it tries to strengthen its balance sheet. To raise cash, the Hague-based firm tried unsuccessfully to sell Belgian mobile-phone unit Base and ended discussions on a potential merger involving its German E-Plus wireless unit and Telefonica SA’s business in Germany.

Changing Behavior

KPN said last month that third-quarter profit fell 32 percent amid increasing German price competition and declining mobile subscription revenue. KPN is struggling with changing consumer behavior as smartphone customers communicate more via messaging technology such as WhatsApp or with calling software such as Skype.

The company’s shares rose 2.4 percent to 4.89 euros at the close in Amsterdam, the biggest gain since Oct. 10.

Wireless carriers, including Deutsche Telekom AG and Sprint Nextel Corp., have sold towers, which carry transmission equipment, to companies that specialize in their management. The phone companies then pay the tower operator for using the infrastructure.

Deutsche Telekom’s T-Mobile USA agreed in September to sell the rights to operate 7,200 cellular towers to Crown Castle International Corp. for $2.4 billion, providing cash to invest in the carrier’s U.S. wireless network.

To contact the reporters on this story: Francois de Beaupuy in Paris at fdebeaupuy@bloomberg.net; Aaron Kirchfeld in London at akirchfeld@bloomberg.net

To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net; Jacqueline Simmons at jackiem@bloomberg.net