The share sale announced by the Dutch authorities today will see the state’s stake reduced from just over 20% to 14%. Netting a neat €1bn, this latest sale demonstrates a degree of confidence in the health of European telco equity markets.

It also brings renewed attention to the Government’s nominal ‘golden share’ in KPN, through which it retains a disproportionate level of control over the company’s fate and future direction even as the state’s equity holding is diminished.

Just more than 6% of KPN is being sold to Lehman Brothers for onward disposal to institutional investors.The €1bn valuation is based around the current KPN share price.

With is newly reduced equity stake of just 14% in KPN, attention has turned to the Dutch Government’s nominal ‘golden share’. Observers are split over whether a ‘golden share’ is compatible with such a tiny minority shareholding; Dutch politicians, meanwhile, have turned this into an issue of national principle.

Proponents and detractors agree that, by relinquishing its effective veto on major changes, the Dutch would be casting KPN into the takeover fray. Supporters of the move point to the unlocking of shareholder value that would result; opponents argue that it would be against national interest.

Given that Den Haag has little interest in keeping hold of €2bn in KPN shares from a monetary point of view, those who oppose the loss of the golden share might seem to be resorting to the classic, albeit patriotic, ‘finger in dyke’ defence. Most likely with less success…
Jim Chalmers