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United Internet shares jump as CEO considers controlling stake

·1-min read

BERLIN (Reuters) - Shares in United Internet opened 5% higher on Friday after the company announced its founder and chief executive Ralph Dommermuth may buy a controlling stake for almost 600 million euros ($693.30 million).

Dommermuth is considering increasing his United Internet stake to 51% from the current 42% for 35 euros ($40.44) per share, the company said in a statement on Thursday evening.

The CEO is negotiating with a major bank and has not yet made a final decision, though he expects to present a potential offer in December, United Internet said.

Together with its mobile phone operator subsidiary 1&1, United Internet faces the challenge of setting up the fourth mobile phone network in Germany alongside Deutsche Telekom, Vodafone and Telefonica Deutschland.

So far, 1&1 does not operate its own network but leases services from Telefonica Deutschland and Vodafone, though it bought frequencies in a 2019 5G auction and must now set up around 1,000 base stations by the end of 2022.

Speaking to Reuters in August, Dommermuth said: "We are late and have lost a lot of time, but we can make up for that."

Dommermuth did not say whether he wants to follow the example of Xavier Niel in France, who bought the mobile phone company Iliad he had founded and delisted it earlier this year, saying the move would make it easier to manage necessary changes.

($1 = 0.8654 euros)

(Reporting by Nadine Schimroszik; Writing by Zuzanna Szymanska, Editing by Miranda Murray)

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