Today is the earlier deadline for the SEC to decide on Telefonica’s offer of CZK 456/share to minority shareholders. Should the SEC require some clarifications, the next deadline for its decision becomes July 21. Given the fact that the price complies with the minimum price requirement of the 6MVWAP of CZK 443/share, we expect the buyout to be approved. We do not expect the buyout success rate to be higher than 10% of the free float (49% of CT) hence the stock should remain on the exchange and start trading on its fundamentals again. We remind that we see CT as an attractive investment based on its strong dividend potential, i.e. a dividend yield of nearly 10% in 2006 and further scope for restructuring under Telefonica’s ownership.
Telefonica’s CEO, Cesar Alierta, was accused of insider trading when he was CEO of tobacco company Tabacalera. Source: Financial Times