The Cabinet is expected to discuss CTel privatization today; its regular weekly meeting beings at 9 a.m. CET. Reportedly, neither Deutsche Bank/Blackstone Group/TDC, nor Swisscom/CVC Capital Partners/Spectrum Equity Investors, the two remaining bidders, raised their bids, despite the Cabinet’s appeal.
Nevertheless, the Cabinet may choose to pursue direct negotiations with the two bidders, since it is pressed for revenue for the state budget. Should CTel not be privatized, however, company management would likely proceed with its restructuring (i.e., capital structure optimization, acquisition of 49% stake in EuroTel), which should bring positive results for the stock. On the other hand, privatization to a financial investor-led consortium could lead to the sale of the controlling stake in EuroTel, which would not be positive for the stock.
Jiri Soustruznik