Three compete in Eutelsat bidding

Private equity houses in Europe and the US are set to bid against trade buyers to acquire the European satellite operator.

Three private equity buyers have expressed an interest in acquiring European satellite operator Eutelsat, put up for sale by its European telecom owners earlier this year after plans were shelved for an IPO of the business.

The Financial Times reports that European private equity firms Apax Partners and BC Partners as well as US firm Carlyle Group have made enquiries about the business, which to date has received only one formal offer from third-largest satellite operator Intelsat.

Eutelsat has been jointly-controlled by France Telecom, Deutsche Telekom and BT since 2001. At the time of the firm’s privatisation last July, the European Commission ordered said that the owners must launch an IPO of the business within two years. However, the decline of the public markets and the virtual closure of the IPO market has led the three European telecom operators to opt for an outright sale.

Private equity firms are drawn to the business due to its regular cash flows coming from long term contracts with satellite broadcasters in Europe. However earlier this year, French private equity firm Eurazeo pulled out of a deal to acquire France Telecom’s 23 per cent stake for E400m. During the same period, KKR and Permira were mooted as possible bidders.

In addition to the offer from Intelsat, PanAmSat is also thought to be in the running to acquire the business. Offers for the business are expected to come in the E3bn to E4bn range.