EQT, the European private equity firm based in Stockholm, is considering a takeover of Dutch phone company Royal KPN in what would be its largest-ever acquisition, according to sources. The buyout firm is in the early stages of discussing the feasibility of a deal with potential advisers, sources said. Shares of KPN have fallen 15 per cent this year, giving the company a market value of about €9.4 billion ($11.1bn). No final decisions have been made, and there’s no certainty an offer will be made, sources said. Any bidder would want to win the backing of KPN management and the Dutch government after the former telecom monopoly previously fought off an unwanted takeover approach. “You have to come in with a very good story,” said InsingerGilissen Bankiers analyst Jos Versteeg. “It depends on the tact of the private equity guys.” A law allowing the Dutch government to block a takeover of a telecom company was approved by both houses of parliament earlier this year, according to a spokesman for the Ministry of Economic Affairs. KPN also has a foundation in place that could act as a defence by enacting a protective measure enabling it to acquire enough stock to thwart an acquisition. Representatives for EQT and KPN declined to comment. “Both the Dutch government and the foundation at the top of KPN can refuse such a deal, for lots of good and bad reasons, not only financial ones,” said David Vagman, an analyst at ING Bank. “They can be political, strategic, chauvinism or management’s own interest, among other things.” KPN, which is valued at about €16bn including debt, has reported declining revenue for more than a decade. Its shares are trading near an all-time low amid fierce competition from regional giants like Vodafone Group. The company appointed Joost Farwerck as chief executive a year ago to replace Maximo Ibarra, after KPN dropped former pick Dominique Leroy, who settled an insider trading probe with the Belgian market regulator in July. Mr Farwerck took over a business that was cost cutting and in search of new revenue streams to ease competitive pressures in its home market, where rivals have been merging. KPN has attracted multiple suitors in the past. It rebuffed a takeover bid in 2013 from its largest shareholder, America Movil, the Latin American wireless operator controlled by billionaire Carlos Slim. Early last year, Canada’s Brookfield Asset Management was considering making an offer in conjunction with Dutch pension funds, Bloomberg reported at the time. That bid never materialised. EQT teamed up with Digital Colony Partners to acquire fibre network owner Zayo Group Holdings in an $8bn deal completed in March. It also has investments in Dutch telecom provider Delta Fibre, German broadband provider Deutsche Glasfaser and Maltese operator Melita. The private equity firm is in the process of raising its fifth dedicated infrastructure fund and last month set a €15bn limit on the vehicle.