Former chief of telecoms group Everything Everywhere, Tom Alexander, is reportedly lining up a private equity-backed bid to secure a deal for the UK’s largest mobile operator.
Alexander has held talks with private equity groups Apax and KKR to support the bid for Everything Eveywhere, a joint venture between T-Mobile and Orange.
Analysts have predicted that the deal could be worth as much as £6.5 billion.
Alexander oversaw the merger of T-Mobile and Orange in 2010 and is understood to have discussed sale with the respective companies, according to the Financial Times.
However, those close to the matter have cautioned that if a sale is indeed in the pipeline it will take some time, as a deal this large could take a significant amount of time to structure.
Another source said that there was no certainty that Alexander would be successful in raising the billions of pounds in capital required, given the harsh economic conditions.
Furthermore, there is also no certainty that parent companies France Telecom and Deutsche Telekom would be willing sell, given that the business is only partly through seeing the benefits of the merger.
Emeka Obiodu, senior analyst at Ovum, believes that the deal is only likely if Alexander can come up with a substantial offer. He also said that if Alexander was successful, a complete restructure would ensue at Everything Everywhere.
“Considering that T-Mobile was struggling prior to entering into this deal with Orange, it is imaginable that it could decide to cut its losses and bail out of the UK. It is imaginable but it doesn’t mean that it has to happen. By entering into the Everything Everywhere infrastructure, it brought on France Telecom to carry its UK operations. I am in no doubt that Deutsche Telekom could continue to sustain its involvement in Everything Everywhere for the foreseeable future,” said
He added: “This is not going to be Everything Everywhere seeking to sell, it’s going to rather be whatever Tom Alexander can come up with from the private equity players that blows them out of the water.”
“Private equity players go into businesses, streamlining them and stripping costs. Effectively making them leaner. When you look at Everything Everywhere it is still two separate organisational entities, trying to come together with all their legacies. Private equity firms would discard this whole legacy culture and impose a heavy-handed, top-down, cost driven culture on the business.”
In other news, Everything Everywhere recently accused rival mobile operators that they are too busy focusing on cost efficiencies, instead of innovation, which is causing delays in the roll-out of 4G in the UK.