The telecom sector is alive with bids at the moment: just recently Holland's Telfort was sold to local rival KPN for over 1bn euro. Italian operator Wind has been snapped up by an Egyptian-led consortium for some 12bn euro. And all the while Spanish group Auna is contemplating accepting a bid from private equity companies.
So it's no wonder that investors reckon that UK mobile group O2 could be next. And why not: the group has "obvious charms", says Mike Monnelly on Breakingviews.com. It has performed well of late, growing rapidly in both Germany and the UK.
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Yet on Friday brokers poured "cold water" on any takeover rumours, says Yvette Esson in The Daily Telegraph, saying a bid is unlikely. Why? For one, both France Telecom and Deutsche Telekom are concentrating their efforts elsewhere: with the result that neither would have the time nor the finances to bid, says Monnelly.
As for a private equity group, it would need some £4bn of equity in order to snap up O2. That's "too big a mouthful" even for today's giant private equity groups. O2 investors could just be getting ahead of themselves
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