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KPN mulls mobile offering
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August 30, 1999: 7:30 a.m. ET
Dutch telecom may spin off unit to fund expansion, list Net venture with Qwest
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LONDON (CNNfn) - KPN Telecom said Monday it may offer shares in its mobile communications unit and seek U.S. and European listings for its Internet joint venture with Qwest.
KPN said rapid growth in the cellular, data and Net markets had prompted it to accelerate future expansion by cashing in on its existing assets. The news sent shares in the privatized company up more than 4 percent despite reporting a dip in first-half profit.
Germany's Deutsche Telekom (FDTK) announced earlier this month that it may fund future acquisitions by offering shares in its mobile and Net assets next year.
KPN Mobiel is the largest mobile operator in the Netherlands with more than 3 million subscribers. The Dutch cellular market is the fastest growing in Europe, with market penetration rising to 32 percent as of the end of last year.
At current valuations, an offering could value the unit at up to 10 billion guilders ($4.7 billion), analysts said. The company previously announced plans to separate the unit from its core business.
KPN posted a 9 percent decline in first-half net profit to 918 million guilders ($435 million) from 1.01 billion, a year earlier. The company issued a profit warning in March after Dutch regulators imposed cuts in domestic and international tariffs. Sales climbed 7 percent to 8.85 billion guilders from 8.26 billion a year earlier.
The results beat expectations, but analysts were more excited about the possibility of the cellular float. "Investors like to have separate shares to invest in, and KPN needs the money," Michael Blok at Rabo Securities told Reuters.
The company also said it would seek to float KPNQwest, its 50:50 Net joint venture with the U.S. firm, in "the near future". Funds would be used to help KPNQwest build an 8,100 mile Internet protocol-based network to serve customers in key European cities.
KPN shares climbed 4.3 percent to 44.85 euros in morning trade in Amsterdam. 
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