Yesterday, the Cesky Telecom BoD approved the terms of a preliminary
agreement reached with Atlantic West regarding the acquisition of the
remaining 49% stake in Eurotel. The parties have agreed on a price of USD
1.05 billion for the stake, to be paid in cash. Eurotel will pay a
dividend of CZK 10.98 billion (USD 407.5 mil.) prior to the closing of the
purchase transaction.
Also, the BoD approved a proposal for a dividend of CZK 18.5 billion from
2002 profits, i.e. CZK 57.50 per share (dividend record day is proposed on
June 27, 2003, and a payment date of October 6, 2003).
The BoD also approved a proposal for the dividend policy of Cesky Telecom,
which stipulates a total dividend payment amounting to 50-70% of
consolidated net profit under IAS for FY 2003 and 2004 (The above
proposals are subject to the review of the SB and to approval by the AGM
on June 13).
Overall, both the Eurotel acquisition news and the dividend news are
likely to be a positive catalyst for the stock. Our target price is CZK
394 per share, and we accumulate the stock.
Jiří Soustružník