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Belgian government open to lower Belgacom stake

The Belgian government has no objections in principle to lowering its stake in Belgacom, a government spokeswoman said on Tuesday, indicating a shift in policy towards Belgium’s dominant telecom operator.

“There are no objections in principle to a possible sale of shares of the state in Belgacom,” the spokeswoman for Minister for Public Companies Inge Vervotte said. “It must be profitable from all points of view,” she added, saying the government would study any opportunity carefully.

The government currently holds about 53.5% and a law stipulates that its holding must stay above 50%. There has been recurring speculation in the Belgian press and among analysts over whether the new Belgian government intends to further privatize the former monopoly through a merger, a step that would require a change of law. In particular, analysts have previously said that the participation of French-speaking socialists in the government made a sale of the state’s stake a touchy subject.

Belgacom shares were up 0.27% at €29.35 at 0740 GMT, outperforming the DJ Stoxx European telecoms index, which was down 0.13%. Belgian media quoted Vervotte as saying in a policy report to parliament on Monday that Belgacom must be able to play a bigger role on the international telecoms market, and that the government was open to discussions about its stake and adapting the regulatory environment. A Belgacom spokesman had no immediate comment. Usual suspects for a cross-border merger are France Telecom and the Netherlands’ KPN. Analysts said Vervotte’s comments appeared a real policy shift for the government.

“Vervotte ... has made a complete U-turn regarding her stance vis-a-vis a potential privatization of Belgacom,” Dexia analyst Rob Goyens said in a research note. “While being firmly opposed to a further privatization previously, she now seems to have adopted a much more neutral stance,” he said. Goyens noted that her change in attitude could be due to M&A activity in the telecoms sector, in particular Deutsche Telekom’s move to buy 20% of the Greek incumbent operator OTE and France Telecom’s interest in a tie-up with TeliaSonera. Other analysts took a similar view. “The minister had already hinted that the door (to further privatization) was open; it appears that it is even more open today,” Degroof analyst Siddy Jobe said in reaction to the spokeswoman’s comments. (Reuters)