Mobile operator Deutsche Telekom is reportedly close to selling its Scout24 internet portal to a US-based private equity fund. The German telecoms giant urgently needs cash to modernize its mobile network.
Germany's Deutsche Telekom is finalizing a deal with US private equity investor Hellmann & Friedmann to sell a 70 percent stake in its online marketplace provider Scout24, Britain's news agency Reuters said Wednesday.
Citing two people close to the negotiations, Reuters said the contract valued Scout24 at about 2 billion euros ($2.71 billion), including debt.
“The deal could be announced in the coming days, but it has not been signed yet,” Reuters quoted one of the source as saying, adding that Deutsche Telekom's supervisory board was meeting on Wednesday to decide on the sale.
Representatives of both parties to the negotiations refused to comment, Reuters also said.
Under the deal, the Scout24 group - which includes real estate platform ImmoScout24, car dealer AutoScout24, as well as social network FriendScout24 and tour website TravelScout24 - would be valued at about 20 times its operating profit in 2012.
It comes as Deutsche Telekom is seeking cash to build a next generation mobile network aimed at improving services for its growing number of customers who use smartphones and tablet PCs. In the third quarter of 2013, the firm's operating profit dropped 2.6 percent to 4.46 billion euros, weighed down by investment notably in the United States.
Investment into high-speed LTE mobile data networks is part of Deutsche Telekom's drive to spend 30 billion euros until 2015, as was announced by Chief Executive Rene Obermann in December 2012.
According to Reuters, Deutsche Telekom was also evaluating its stake in British mobile operator EE, which is part of a joint venture with France Telecom.
uhe/dr (Reuters, AFP, AP)