Belgacom closes on Telindus

Belgacom is poised to buy Telindus for €600m ($726m) after France Telecom withdrew its counterbid for the Belgian communications network group.

Belgium’s state-controlled telecoms company won over Telindus after sweetening its cash offer to trump France Telecom’s €566m recommended bid. Telindus, based in northern Belgium but present in 14 countries, operates services such as internet telephony, telecoms networks and video surveillance systems.

Former monopolies such as Belgacom face increased competition and want to offer these services to boost revenues made outside traditional fixed-line businesses.

Bart Jooris, analyst at Fortis bank in Brussels, said the acquisition would allow Belgacom to offer fresh products and retain customers tempted to go elsewhere.

“Up until now, Belgacom was unable to accept large orders from existing corporate clients because it had capacity constraints. This acquisition should allow it to offer these customers more services and gain Telindus clients,” he said.

Belgacom’s final offer represents a premium of 42 per cent over Telindus’s share price in September, when its first bid of €13.5 a share was rejected. Some analysts said the final price was too high, but others said it was easily digestible by Belgacom and reasonable for an important acquisition. Telindus had sales of €532m last year but has not made a profit in four years. France Telecom last month bid €15.80 a share in an offer that was accepted by almost a fifth of the group’s shareholders, including the founding family.

The French group had hoped Telindus would give it a stronger position in network services in the Benelux region. But Belgacom last month returned to woo Telindus by offering €16.60 a share. Telindus fell 0.7 per cent to €16.53, while Belgacom gained 1.6 per cent to €28.01. Belgacom was advised by ING and Petercam, and CSFB is acting for Telindus.