Reports from the last week indicate that the Cabinet will discuss Cesky Telecom privatization this week, but probably not at its meeting today.
Recall that Patria upgraded Cesky Telecom to a speculative buy last Tuesday. We see the likelihood of CT privatization being canceled as slightly above 50%; in such case the stock price should rise, no matter the next possible steps (e.g., the 100% acquisition of Eurotel, the No. 1 domestic cellular operator, 51% owned by CT; or a major dividend payment)..
Should the sale be completed (a TDC/Deutsche Bank consortium won the CT tender, though negotiations with the government on a purchase agreement have become entangled), the 100% takeover of Cesky Telecom by its majority shareholders (C-Tel, TDC/Deutsche Bank SPV) could be expected to follow. The takeover would squeeze out minority shareholders at a price set by a court-certified expert. We would not expect the buyout price to bear a significant premium to the market price at the time of a takeover. This could result in a vicious circle of the market price being depressed by expectations of an unattractive buyout price, itself influenced by the market price at the time of the takeover..
Jiri Soustruznik