Europe’s largest fixed-line carrier Deutsche Telekom AG has denied weekend reports that it is still interested in acquiring UK-based mobile operator O2 Plc.
The denial comes a month after Deutsche Telekom and the largest telecoms carrier in the Netherlands, Royal KPN NV, admitted that they had been in discussions regarding a partnership, but talks ended without agreement on an offer for the UK-based mobile operator.
At the request of the panel on takeovers and mergers, Deutsche Telekom confirms it has no present intention of making an offer for O2, Deutsche Telekom said at the time. Under UK merger rules, the declaration means that Deutsche Telekom and KPN are prevented from making fresh approaches to O2 for a period of six months unless a third party comes in with a formal offer of its own.
Now Deutsche Telekom has been forced yet again to deny interest in Slough, UK-based O2, after reports in the UK media at the weekend claimed that Deutsche Telekom was preparing to pay up to 18bn pounds ($31.7bn) for the operator.
We have no interest, said Deutsche Telekom CFO Karl-Gerhard Eick was reported to have told a press conference earlier this week. The topic for us is closed.
This emphatic denial comes after last week, when the carrier’s CEO, Kai-Uwe Ricke, reportedly told a Goldman Sachs conference that there would be consolidation among the UK’s mobile-phone operators.
O2 operates in the UK, Ireland, and Germany, and is Europe’s sixth largest mobile phone company, with a total of 26 million customers, with 15 million in the UK. There is some concern that due to O2’s limited market reach, it lacks the scale to compete against some of the more global players such as Vodafone Group Plc and France Telecom’s Orange SA.
These concerns have meant that the UK operator has been constantly at the center of takeover speculation, especially after it rebuffed a takeover offer from KPN in February 2004. KPN and Deutsche Telekom have long been viewed as offering a good fit with O2, especially due to O2’s strong presence in Germany.
Deutsche Telekom’s own operator, T-Mobile International AG, is already a player in the UK market, although its second-quarter revenue fell 8.7% amid fear that growth is stalling.