The Belgian telecom market appears set for some significant changes as the fight to acquire Voo shows no sign of abating. First Orange showed an interest in Voo and then Telenet announced its interest, followed by Voo’s majority owner Nethys stating it isn’t for sale. Now Telenet and Nethys have expressed interest in acquiring Voo’s minority owner Brutele in an attempt to force a market consolidation. Both companies could benefit in terms of costs from such as an acquisition, but much will depend on the political climate in Belgium in the coming months and the price they offer for Brutele.
Telenet’s CEO has previously talked about his desire to own all of the cable networks in Brussels, so after Nethys’ rebuke, Telenet’s approach to Brutele doesn’t come as a surprise. Perhaps more of surprise is Nethys’ expressed interest in Brutele, as the former is already in the midst of a complicated restructuring of its various subsidiaries. The two 'intercommunal' companies are already intertwined through the use of the Voo brand. For Voo to operate, the two companies are linked at economic, financial and legal levels and share for example marketing and sales efforts to promote their common brand Voo.
The existing alliance would make it easier for Nethys to incorporate Brutele than it would be for Telenet (or Orange), and the municipalities owning Brutele might welcome a simplification of Voo’s ownership structure. Incorporating Brutele’s shareholders would offer cost savings and would give those shareholders access to higher dividends from a larger company (Nethys).
However, there is also a political aspect, as municipal elections are scheduled for October this year in Belgium. No councillor will want to be seen selling off the people’s cable network at the wrong moment or for the wrong price. Nethys and its publicly owned holding company Publifin have been plagued by political scandals in the past year, which may make Brutele’s shareholders more resistant to selling to the partner company.
If Brutele is sold to Telenet or Orange, the pressure on Nethys to sell to the same company could intensify. If Brutele is sold to Nethys, it could strengthen Nethys to help it resist a sale to Telenet or Orange, but also make the company overall a more attractive take-over target.
Not unsurprisingly, it could come down to price: if Telenet (or Orange) come up with an especially good offer for Brutélé, the municipalities may not be able to resist selling to an external company instead of Brutele’s partner. Both Orange and Telenet would benefit in terms of operating costs from acquiring Voo, and with the financial backing of their parents, make strong offers based on the expected synergies.
