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KPNQwest set for breakup as AT&T pulls out
After the expected buyer backed off at the last minute, the bankrupt telco is looking at its other options
KPNQwest moved one step closer to being broken up on Thursday, after US service provider AT&T backed out of a bid to buy the complete network.
Contracts are being sent out for individual parts of the network such as Ebone, a recently purchased and still more or less autonomous part of KPNQwest, making it now very unlikely that the network can be sold in one piece.
AT&T's bid, believed to be for something less than 100m euros (£65m) in cash, was withdrawn as AT&T "could not get its act together", in the words of a source close to the sales process.
This apparently leaves one known serious bid for the whole network still standing, from Dutch investment group Trimoteur, but French liquidators have promised to sell KPN's French unit separately on Friday, which effectively means any deal for the whole network must go through in less than one day. "If the door is still open, it means there is very little time left for due diligence," said a source.
The Trimoteur bid has been regarded with doubt in the past for not being based on cash, but late on Thursday, one rumour showed it in a more serious light. A source had heard that Trimoteur had already bid 10m euros for the French network if it goes separately.
A UK-based consortium is apparently after the Ebone network, although any deal for Ebone must be made quickly, as Ebone does not own the fibres on which its network runs. As transmission bills are almost certainly not being paid, these fibres must eventually be denied it.
Other parts of the network should find buyers, although for a fraction of the cost of building. Deutsche Telekom is reported to be interested in the trans-Atlantic links, while Interoute is believed to also want Ebone. Even Dutch telco KPN, so far keeping its distance from the joint venture it part-owned, could step in and make an offer for some of it.
"Constructing the Ebone network cost billions of euros," said Graham Kinsey, staff convenor at the Ebone network centre in Belgium. "Fibres were leased at 1997 to 1999 prices."
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