UK: O2 boss mulls £8.5bn management buyout after failed merger

O2 chief executive Ronan Dunne is exploring a debt-fuelled £8.5bn management buyout attempt following the collapse of CK Hutchison’s takeover bid for the mobile operator, The Daily Telegraph can reveal.

The Irishman, 52, has been approached in recent weeks by potential private equity sponsors aiming to carry out what would be the largest UK leveraged buyout since before the financial crisis. Executives at O2’s Berkshire headquarters are running the numbers to weigh whether it would be feasible for Mr Dunne, who has led O2 for eight years and previously served as its chief financial officer, to take it independent, sources said.

The discussions, which are in their early stages after the European Commission confirmed last week that it would not allow Hutchison to merge its own UK mobile operator, Three, with O2, are understood to not involve O2’s parent company, Telefonica. The Spanish giant remains bound by an exclusivity agreement with Hutchison until the end of next month unless the two sides agree to walk away sooner.

Investment bankers working with potential sponsors have pegged O2’s valuation in a leveraged buyout at £8.5bn, short of the £10.25bn that Hutchison was willing to pay, because of the savings it would have made by merging two networks.

Full Content: Telegraph

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