UPDATE 1-Deutsche Telekom lining up Goldman for Scout24 sale

Mon Mar 18, 2013 8:51am EDT

* Seeking proceeds of at least 1.5 bln euros

* Unit valued at 14-15 times EBITDA

* Private equity investors among potential buyers

* Axel Springer and Bertelsmann seen as interested

FRANKFURT, March 18 (Reuters) - Deutsche Telekom is close to appointing Goldman Sachs to manage the sale of its online classified advertising unit Scout24, two sources close to the deal said.

Europe's third-largest telecoms group behind Vodafone and Telefonica said late last year that it would evaluate the options for Scout24 to free funds for more investments.

The Bonn-based group hopes to fetch at least 1.5 billion euros ($1.96 billion) for Scout24, another source familiar with the sale said on Monday.

Scout24, a bundle of internet portals including European car trading site AutoScout24, could become one of only a few financially successful investments for Deutsche Telekom.

The group does not have a strong track record with acquisitions. Over the past decade it was forced to write off almost two thirds of the value of VoiceStream, which it bought for $51 billion in 2000. It now operates under the name T-Mobile USA and is in the process of being merged with MetroPCS.

Deutsche Telekom's T-online unit bought the Scout group for 180 million euros in 2004 from Swiss private equity firm Beisheim.

Publisher Axel Springer, owner of Germany's top-selling daily newspaper Bild, has said in the past that it will look at Scout24. Sources familiar with the company have said that Springer tried to buy the portal in 2004 but was outbid by Deutsche Telekom.

Media conglomerate Bertelsmann is also set to throw its hat into the ring, as is private equity investor Apax , which owns the UK's Auto Trader portal, the sources said.

Further potential bidders include private equity firms Warburg Pincus, Providence, Charterhouse, BC Partners, KKR, Hellman & Friedman and EQT, sources familiar with the investors said.

Providence and Hellman & Friedman were not immediately available for comment, while Deutsche Telekom, Goldman Sachs and the other prospective buyers declined to comment.

A 1.5 billion euro price tag would valuate Scout24 at 14 to 15 times earnings before interest, tax, depreciation and amortisation (EBITDA), a source familiar with the company said.

That is slightly below a ratio of almost 18 for peer Rightmove, according to Thomson Reuters StarMine data.

Deutsche Telekom is also looking at options for its British mobile telephony operator EE, a joint venture with France Telecom. Both partners have said that an initial public offering of part of the shares by the end of this year was the preferred option.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.