KPN Mobile sells Hutchinson 3G share

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KPN Mobile sells Hutchinson 3G share

KPN Mobile has agreed to sell its 15% share in Hutchison 3G to Hutchison Whampoa for a total of £90m.

Hutchison Whampoa in Hong Kong has already paid £60m to KPN Mobile, and will make three further payments of  £10m in 2005, 2006 and 2007.

The companies added that all legal proceedings have been terminated.

Earlier this year, Hutchison 3G requested funding from its three shareholders, Hutchison Whampoa, KPN and NTT DoCoMo.

The legal dispute began in June when Hutchison Whampoa began legal proceeding against KPN Mobile for declining to loan £150m to the venture. KPN countersued and called for Hutchison Whampoa to buy out its Hutchison 3G UK stake at 140% of its value.

The move, which will give Hutchison Whampoa an 80% share in Hutchison 3G UK, will consolidate Hutchison Whampoa's operational and managerial control over the company, but will not have much effect on users, according to Stuart Gordon, a telecommunication analyst with ABN Amro Bank.

"I don't think it will mean anything for users as Hutchison Whampoa was already the majority shareholder in Hutchison 3G UK," Gordon said.

"In terms of the money they're paying, I'm not sure if the shareholders would think this is a good use of capital."

The agreement between Hutchison Whampoa and KPN is also unlikely to ease the way for bringing NTT DoCoMo's I-mode service to the UK, he added.

Hutchison Whampoa said the deal was "an excellent transaction" and that the company was "confident that [Hutchison 3G UK, also called 3] will have a promising prospect and will create long-term value for our shareholders."

Laura Rohde writes for IDG News Service


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