Monaco Telecom attracts PE interest

A string of private equity firms including Eurazeo, PAI and Apax are reported to have expressed an interest in acquiring the 55 per cent stake in Monaco Telecom held by Vivendi Universal.

Monaco Telecom, the incumbent telecom operator for the Mediterranean principality, has been the subject of strong interest from a group of private equity firms hoping to snap up the 55 per cent stake in the business being sold by Vivendi Universal.


Monaco Telecom has declined officially to identify the interested parties, although Dow Jones Newswire reports that French private equity firms Eurazeo and PAI Partners are included in the bidding as well as Apax Partners, Providence Equity Partners and Platinum Equity of the US.


However, the bidding financial groups are unlikely to have it their own way with at least half a dozen European telecom groups also expected to bid for the business. These include Swisscom and Belgacom, the respective incumbent telecom operators in Switzerland and Belgium, Orange, Bouygues Telecom, and Telecom Italia Mobile.


Monaco Telecom is the incumbent operator for the principality, which has a population of 30,000. The local governing body, the Monaco Principality, which holds the remaining 45 per cent stake in Monaco Telecom, is not planning to sell its interest in the near future.


Dow Jones reports that the stake being sold is valued at between E165m and E220m, giving Monaco Telecom an overall value of between E300m and E400m.


In the past three years, Monaco Telecom has enjoyed steady growth despite the broader downturn in the telecom industry. In 2002, the business reported sales of E172m, slightly down on 2001 (E174m) but just under 20 per cent up on the 2000 figure. During the same period, net profit has increased from E15.6m to E22m.


In December 2001, the company was the first operator in Europe to launch trials for third generation mobile technology. It is also expected to be one of the first in Continental Europe to deliver television over a high-speed Internet service, which it expects to do in three or four months  time. In total, the company has 29,000 analogue phone line users and 4,000 high-speed users.


Vivendi Universal and Monaco Telecom are expected to hold talks over the coming weeks to discuss plans for the sale.