EUR 1.2bn offered for Telekom– Two serious bids for the telecomms operator

(Photo: telekom.rs)

For its 58% shareholding in Telekom Srbija the state is expecting EUR 1.5bn. According to Novosti`s unofficial sources, the highest offer from potential buyers is EUR 1.2bn, which a foreign investment fund is prepared to pay for such a stake. Unconfirmed reports suggest that also the Russian telecoms operator is prepared to raise its original offer.

“If more than EUR 1.2bn is paid for 58% of the shares, it is obvious that the buyer will in fact be sold 73% of the ownership”, a source close to the privatisation adviser told Novosti.

The point is this: the majority owner of Telekom Srbija is the state with 58.11% (581m shares). Small shareholders, mostly individuals and present and former staff of Telekom, hold 21.89% (418.7m shares), while the remaining 20% is owned by Telekom itself. So by acquiring 58% of the shares, the buyer will in practice get 20% for nothing.

“The problem is, if this is how it`s calculated, out of those 20% which is 200m shares, 15% must be distributed free of charge to citizens, and 7% to present and former staff and pensioners of Telekom”, says Novosti`s source. “So in this case the new owner would in practice have 73% of the ownership.”

If Telekom annuls its own 20% shareholding, the remaining 800m shares would represent 100% of the ownership, so by buying 581m shares the new owner would still obtain a straight 72.64% of the capital of the sole Serbian state operator.

Assessing the value

In the previous tender in 2010, the value of 100% of Telekom was estimated at EUR 2.45bn. According to Novisti`s unofficial information, the privatisation adviser has now estimated the entire company at a considerably lower value. There are eight interested buyers in the game, among which there are for the first time investment funds.

Translation provided by: www.halifax-translation.com