Belgacom to sell €3.91bn in stock

SHAREHOLDERS in Belgacom, Belgium's main fixed-line telecom company, will sell up to €3.91 billion in stock in Europe's biggest initial public offering in three years, the Brussels-based company said yesterday.

The sale values the State-controlled phone company at almost €9.35bn, three times as much as Ireland's Eircom, which will return to the Irish stock exchange later this month.

The initial offering is Europe's biggest since France Telecom sold a €6.3bn stake in mobile phone company Orange in February 2001. Investment banking heavyweights Goldman Sachs, Lehman Brothers, Morgan Stanley and UBS are managing the process.

An investor group including American communications giant SBC, Singapore Telecommunications and Danish telecom operator TDC is selling its combined stake in the phone company. Belgacom, which controls about 70% of the Belgian fixed-line market, will raise no additional funding from the offering.

The Belgian government will own about 52% of Belgacom after the offering. It will keep its 50% plus one share, though can sell any shares it owns above that threshold after a 180-day lockup period. The shares will begin trading in Brussels on March 22.

The banks will initially sell as many as 134m shares and can increase the offering up to 147.4m shares.

Belgacom's Proximus mobile unit lost market share last year to its main competitor BASE, which is owned by Dutch telecom company KPN, which once held a strategic stake in Eircom and recently ended talks to buy the parent of mobile operator O2.