Saudi Arabia’s stc Group considers possible offer for United Group

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Saudi Arabia’s stc Group is in the early stages of considering an offer for European telecom and pay-TV operator United Group, according to three people with knowledge of the potential deal.

UK buyout group BC Partners, which acquired United Group in 2019 from KKR, is working with advisors on a sale due to start in the coming weeks.

stc has started early-stage work on a transaction, which may or may not result in a formal offer.

A deal could value United Group around EUR8bn ($8.7bn) including debt, one of the people said.

The sources, who requested anonymity as the matter is confidential, cautioned that a deal was not certain and may not happen.

If stc Group succeeds with a deal for United, it will further its expansion into the European telecoms sector. Last year, Saudi Arabia’s largest telecoms operator said it had acquired a 4.9 per cent stake in Spain’s Telefonica, with the potential to increase it further to nearly 10 per cent.

stc Group´s subsidiary TAWAL also acquired United Group’s telecommunications tower assets in Bulgaria, Croatia and Slovenia in 2023.

BC Partners is considering different ways to maximise the value of a sale, including splitting it into different regions.

The sale has also attracted attention from infrastructure funds interested in bidding for specific countries including Greece, Croatia and Slovenia.

Abu Dhabi-based e& Group said in April that it reviewed “relevant market opportunities” but had not entered into any negotiation or agreement to acquire United Group. This followed press reports that it was considering acquiring the European group.

United Group’s revenue and earnings before interest, tax depreciation and amortisation after leases, a measure of profitability, grew 7 per cent to EUR2.7bn and EUR 988m respectively last year.

The capital structure of the group includes EUR4bn of senior secured notes issued by United Group and 300 million euros of payment-in-kind notes issued by its parent company Summer Bidco, according to a note published by S&P in January.

Read: e& Group refutes report of potential United Group deal