Race for €12bn Spanish LBO gathers speed

A consortium comprising Apax, Blackstone and CVC has made a new offer for the Spanish telecommunications company Auna as rival KKR joins the fray.

As private equity firms close in on Grupo Auna SA, shareholders of the Spanish telecommunications company have announced their intention to sell their stakes in the company.

In what has already been a protracted bidding process, the announcement

A bid in the region of €12 billion would be the largest European buyout ever.

yesterday marks the first time that the three shareholders that control 83 percent of Auna – Spanish utilities Endesa and Union Fenosa as well as bank Santander Central Hispano – have publicly confirmed their willingness to sell.

The three owners have hired Merrill Lynch to advise them on the sale of their stakes in the business.

The company has received at least two competing bids, both believed to be in the region of €12 billion ($15.6 billion), according to Dow Jones. The first comes from a pared-down consortium that has been tracking Auna for several months, comprising Apax Partners, The Blackstone Group and CVC Capital Partners. A rival bid has reportedly been launched by Kohlberg Kravis Roberts.

Both parties are interest in acquiring all of Auna’s assets. Meanwhile The Carlyle Group and Providence Equity Partners, which at one stage were part of the Apax consortium, recently teamed up with Ono, an Auna competitor, to offer €2.6 billion for Auna’s cable operations. Auna’s shareholders have yet to respond to that offer.

Auna reported sales last year of €4.24 billion. The company’s cable division is Spain’s second largest fixed line telephone operator after Telefonica and its

The biggest European LBO ever?

wireless division is the third largest player in the mobile telecoms arena.

A bid in the region of €12 billion would be the largest European buyout ever and would follow hard on the heels on the largest US LBO in a number of years – the recent $11.3 billion acquisition of financial software company SunGard by a consortium of US private equity firms.

The deal comes as private equity firms appear to have been denied in the €12 billion auction for another European telecommunications company – Italian telecom operator Wind SpA. Weather Investments, a private consortium backed by Egyptian entrepreneur Naguib Sawiris, is understood to be close to finalising the deal, having beaten off competition from The Blackstone Group.