Deutsche Telekom Said to Near Scout24 Sale
Deutsche Telekom AG (DTE) is nearing an agreement to sell a 70 percent stake in its Scout24 Holding digital-classifieds business to Hellman & Friedman LLC, according to three people familiar with the auction.
The purchase would value the business at about 2 billion euros ($2.7 billion) including debt, said the people, who asked not to be named as the decision hasn’t been made public. An announcement by Bonn-based Deutsche Telekom may come this week, the people said.
Scout24, Germany’s largest real-estate and dating portal, has 14 million monthly users and operates in 22 countries, also providing online classifieds for cars, jobs and travel. Deutsche Telekom this year sought a partner to help expand the business and to generate cash to invest in landline and mobile-phone networks in Europe.
Andreas Fuchs, a spokesman for Deutsche Telekom, declined to comment on the auction, as did Charlotte McMullen, a London representative for San Francisco-based Hellman & Friedman.
Profitability at Deutsche Telekom’s digital business unit, which includes the Scout group, declined last year, with earnings before interest, taxes, depreciation and amortization of 137 million euros, or 16 percent of the division’s 868 million euros in revenue. That compares with a 20 percent margin in 2011.
Europe’s phone companies are looking to offload Internet and content businesses as they seek to raise money for building high-speed mobile networks. Telecom Italia SpA (TIT) this month put its TI Media Broadcasting unit up for sale. Telefonica SA (TEF) of Spain last year sold its stake in online travel agency Rumbo.
Deutsche Telekom fell 0.3 percent to 11.18 euros at 9:17 a.m. in Frankfurt. The stock has gained 30 percent this year, valuing the carrier at almost 49.8 billion euros.
Germany’s biggest phone company this month agreed to buy Warsaw-based GTS Central Europe for about $730 million, adding landline networks in eastern European countries where the carrier’s services are predominantly wireless. Deutsche Telekom is turning its focus back to Europe after merging its T-Mobile US unit with MetroPCS Communications Inc. six months ago.
Hellman & Friedman, a private-equity firm, was founded by the late F. Warren Hellman, a onetime president of Lehman Brothers Inc., and Tully Friedman in 1984.
Other bidders for Scout24 include EQT Partners AB and Silver Lake Management LLC. Axel Springer AG (SPR), Germany’s biggest newspaper publisher, said in September it was no longer interested in the asset after having considered a bid.