(Bloomberg) — Orange Belgium is in talks to purchase an almost 75% stake in Voo SA, a telecom and cable operator in Wallonia, at a price that would give the entire company an enterprise value of 1.8 billion euros ($2 billion).
The price is 9.5 times Voo’s earnings before interest, taxes, depreciation, amortization and synergies, Orange Belgium said Tuesday. Orange Belgium said it would fund the acquisition by increasing its debt, with the support of Orange SA.
The deal “could drive a bolstered competitive position if exclusive negotiations succeed, and support fiber ambitions in Flanders,” Erhan Gurses, analyst at Bloomberg Intelligence, said in a research note. “This could result in stronger convergence, as well as an infrastructure threat to Telenet and Proximus.”
Shares in Brussels-based Telenet Group, which said Monday it lost out in the bidding for Voo, fell as much as 4.1% in early trading, while those in local rival Proximus SA declined as much as 2.7%. Shares in Orange Belgium gained 1.5%.
The parent company has been vocal about looking to strike deals, from Spain to Ethiopia, after the company has struggled with competition in its key markets.
“We are actively thinking about the Spanish market and its structure,” Orange Chief Financial Officer Ramon Fernandez said Wednesday at the Morgan Stanley TMT conference. “If there is a good M&At option involving us directly, we will consider it of course.”
Stephane Richard will complete his third mandate as chief executive officer of Orange in May. His handling of a dispute when he was an adviser to a French finance minister is set to go on trial Wednesday.
Voo, owned by regional telecom firm Nethys SA, runs the cable network in the Walloon region and part of the Brussels region, and offers fixed and mobile telephony, broadband internet and television services.
A previous attempt to sell Voo to Providence Equity Partners was blocked by a commercial court in Liege in April, according to a report from L’Echo.
A spokesman for Orange SA declined further comment on the transaction.
(Updates with details and share prices in third-fourth paragraphs.)
More stories like this are available on bloomberg.com
©2021 Bloomberg L.P.
