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Deutsche Telekom should weigh asset sale

Deutsche Telekom, Europe's largest telephone company, should consider selling or splitting off „non-core” assets such as real estate and the US wireless unit, an investor said.

The value of the T-Mobile USA unit isn't „properly reflected” in Deutsche Telekom AG's share price and the division doesn't generate „substantial” synergies with the group, Isle of Man-based Laxey Partners Ltd. said in a statement yesterday. In an October 25 letter to Deutsche Telekom supervisory board Chairman Klaus Zumwinkel, Colin Kingsnorth, a director of Laxey's Value Catalyst Fund, wrote he's concerned the German company's management isn't focusing its time and financial resources in the „highly competitive” telecommunications market.

„What are you going to do with T-Mobile USA?” Kingsnorth said in a phone interview yesterday. „Are you seriously considering selling it, floating it? Those are the issues we really want them to debate. We don't think there's much of a debate now.” Kingsnorth said Laxey owns more than €100 million ($128 million) in shares of Deutsche Telekom.

The Bonn-based company had a market value of €60.3 billion at yesterday's close. Deutsche Telekom „is currently spread too thinly outside Europe and partially within Europe to be able to create superior value with each of its assets in the long-term,” Kingsnorth wrote in the letter. (Bloomberg)