LONDON (Reuters Breakingviews) - DUTCH COURAGE. Buyout barons eyeing up KPN are having to contemplate an increasingly narrow door. The Dutch telecom firm’s shares have risen nearly a third since October, when Bloomberg first reported that EQT was lining up a potential bid. If the Swedish private equity firm is still interested, as the Wall Street Journal suggested on Thursday, it’s going to have to dig deeper and probably accept lower returns. The potential EQT bid is at 3 euros per share, a measly 4% premium to Wednesday’s closing price. That would value KPN’s equity at 12.6 billion euros. Including around 6 billion euros of net debt, EQT and its partners will have to borrow 12 billion euros, assuming leverage of 5 times this year’s EBITDA. That translates into an internal rate of return of just 14%, assuming stable margins and modest top-line growth, according to Breakingviews calculations. That’s hardly stellar, and there’s a risk the government nixes the deal before it happens. KPN’s modest 2% share price rise suggests private equity may have missed the boat. (By Ed Cropley)