Try the new FT.com

November 7, 2005 10:15 pm

KPN rejects takeover speculation

  • Share
  • Print
  • Clip
  • Gift Article
  • Comments

KPN, the Dutch telecoms company, on Monday rejected suggestions it had become vulnerable to a take-over as consolidation gathers pace in the wake of Telefónica of Spain’s £17.7bn ($30.8bn) bid for O2, of the UK.

In remarks directed at analysts who increasingly view the company as potential prey, Ad Scheepbouwer, KPN chief executive, told the FT: “We can take care of ourselves very well, thank you.”

Mr Scheepbouwer said KPN had a “significant [mobile] business” in the Netherlands, Belgium and Germany – a combined market of 110m people.

“We have €2bn in cash flow a year to spare, to either give to our shareholders or invest in M&A. We will continue to invest in our business going forward and selective M&A cannot be excluded. We shall keep our eyes and ears open and as and when we see opportunities we will take advantage.”

KPN has been at the centre of takeover speculation, notably related to interest in the Dutch group by Telefónica. KPN has also been involved in unsuccessful efforts to buy O2.

Mr Scheepbouwer’s comments came as KPN shares slid 2.7 per cent to €7.96 in morning trade, a slump analysts blamed on its refusal to answer questions about its potential role in market consolidation during its third-quarter results presentation. The shares ended off 1.2 per cent at €8.08.

KPN raised full-year guidance for ebitda from a mid-single-digit decline to a fall of “less than 5 per cent”.

Mr Scheepbouwer said that reflected the fact that everything was “doing a bit better than we anticipated”.

KPN also cut capital expenditure from €1.7bn ($2bn) to €1.4bn and, as a result, increased forecast free cash flow from more than €2bn to more than €2.3bn. Free cash flow rose 13 per cent in the third quarter to €1.94bn.

Revenues fell to €2.93bn from €2.96bn a year earlier. Net profit was €334m compared to €367m.

Ebitda fell to €1.15bn from €1.21bn a year earlier, in line with expectations and reflecting the struggles facing a fixed-line operations facing competition from cable companies launching telephony, internet and television packages.

Mr Scheepbouwer said KPN had resolved technical issues that delayed the launch in the Netherlands of a voice over internet protocol service. The roll-out will go full-speed from January 1, he said, adding “early interest is very encouraging”.

The development is one of several internet-based initiatives that will transform KPN’s declining fixed-line activities.

“A year from now we have a totally different proposal for the market than today,” Mr Scheepbouwer said.

Copyright The Financial Times Limited 2017. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.

  • Share
  • Print
  • Clip
  • Gift Article
  • Comments

NEWS BY EMAIL

Sign up for email briefings to stay up to date on topics you are interested in

SHARE THIS QUOTE