Telefonica SA is preparing a sale of its stake in the Czech Republic’s biggest phone company to raise cash for further industry consolidation, according to three people familiar with the matter. Group Inc. and SA are helping Telefónica to find a buyer for its 69 percent holding in Telefónica Czech Republic AS, the people said, asking not to be identified because the discussions are confidential. The stake has a market value of about $3.6 billion.
According to Tomas Tomcany, Patria Direct analyst, this could be supportive for the stock, although the price of the stake will be crucial. "We do not expect significant premium for the majority stake in , if any, given its current valuation. In our view, PPF seems to be the most likely buyer at the moment," Tomcany said.
In case Telefónica CR was up for sale a new acquirer (if it purchased a majority stake) would be obliged to make a tender offer for remaining shareholders’ shares. An acquiring company would be given a variety of options how to set the offer price. Likely, the offer price would at least have to equal a price an acquirer would have paid for the majority stake (or it could be a kind of historical average price).