Deutsche Telekom moves closer to Scout24 sale

Deutsche Telekom is moving closer to a sale of Scout24 Group, its online portals subsidiary, according to sources cited by Reuters.

The German telecoms incumbent is on the verge of appointing Goldman Sachs (New York City, NY, USA) to manage the sale of the unit, with German media groups Bertelsmann (Gutersloh, Germany) and Axel Springer (Berlin, Germany) both reckoned to be interested in a takeover, according to the Reuters story.

Deutsche Telekom is moving closer to a sale of Scout24 Group, its online portals subsidiary, according to sources cited by Reuters.

The German telecoms incumbent is on the verge of appointing Goldman Sachs (New York City, NY, USA) to manage the sale of the unit, with German media groups Bertelsmann (Gutersloh, Germany) and Axel Springer (Berlin, Germany) both reckoned to be interested in a takeover, according to the Reuters story.

Deutsche Telekom (Bonn, Germany) was first reported to be considering a sale of Scout24 in January, hoping to raise funds to invest in broadband networks in Germany and the US.

Analysts think a sale could generate as much as €1.5 billion (€1.9 billion) for the operator – which would reportedly be about 14–15 times what Scout24 makes in earnings before interest, taxation, depreciation and amortization.

The subsidiary includes ImmobilienScout24, an online property marketplace, as well as AutoScout24, an online car marketplace with a presence in 18 countries in Europe.

In February, REA Group (Melbourne, Australia), an online property marketplace based in Australia, was also reported to have expressed interest in bidding for Scout24, should the Deutsche Telekom subsidiary go up for sale.

Owned by News Corporation, published of The Australian newspaper, REA Group would use an acquisition to help fuel its international expansion, said Greg Ellis, REA Group’s Chief Executive.

At its Capital Markets Day in December last year, Deutsche Telekom announced an ambitious plan to spend €30 billion in capital expenditure over the next three years, with a substantial amount going towards the rollout of high-speed fibre-optic and 4G networks in Germany and the US.

The company intends to lower dividends in 2014 and 2015 to help fund the improvements, but proceeds from the sale of Scout24 would also help.

Besides Bertelsmann and Axel Springer, private-equity firms Apax Partners (London, UK), Warburg Pincus (New York City, NY, USA), Providence Equity Partners (Providence, RI, USA), Charterhouse (New York City, NY, USA), BC Partners (London, UK), KKR (New York City, NY, USA), Hellman & Friedman (San Francisco, CA, USA) and EQT Partners (Stockholm, Sweden) have also expressed interest in buying Scout24, according to Reuters.