| Some three year ago, the ground-breaking deal in Holland was the splitting up of conglomerate Vendex through spin-offs of two major divisions. It spun off its recruitment division, Vendior, and two years ago also spun off its retail interests in a new company called Laurus. Vendex itself was left as a focused department-store business. In the course of privatization IPOs, the old Dutch state PTT was also restructured into separate post and telecoms companies. KPN was effectively a spin-off of the former state monopoly. Now, it is the turn of the spin-offs to restructure themselves. This may increasingly be done by partly splitting-off divisions through equity carve-outs, which allow parent companies to retain a significant equity interest. Last November, KPN and Qwest Communications International chose to float their fibre-optic cable joint venture company, KPN Qwest, by way of a public sale of 20% of the equity. Buoyed by investor enthusiasm for all things related to cable and the internet, KPN Qwest's share price quickly rose from a listing price of e20 to e43. The joint-venture partners will receive value from this performance through their retained stakes. |