The Czech Cabinet is scheduled to discuss the tender results of the Cesky Telecom privatization tender today (the Cabinet session begins at 10 a.m. CET and a press conference is scheduled for 4 p.m. CET; early info might be forthcoming around lunch-time). The bids are said to be well below the government’s minimum price of CZK 80 bil. (for a 51% stake, i.e., CZK 485 per share). Unless the Cabinet climbs down and accepts a lower price in such a scenario, it could postpone the sale until after the upcoming general election (June), or choose to negotiate further with (some of) the bidders.
The Czech Press Agency reported last night that a Deutsche Bank/Blackstone Group consortium, supported by TDC, had bid CZK 90 bil. for a 78% Cesky telecom stake (78% representing the combined government and TelSource stakes), which implies approximately CZK 360 per share and CZK 59 bil. for the government’s 51% stake, i.e. below the government’s CZK 80 bil. target. According to the Czech MFDnes newspaper, this bid is also higher than those of the other two consortia—Swisscom/CVC Capital Partners/Spectrum Equity Partners, and OTE/Apax Partners/Doughty Hanson/Warburg Pincus— which, according to the paper, are below the current market capitalization (the market now values the 51% stake at CZK 55 bil.).
Orange is not bidding, but has expressed interest in buying CT’s 51% stake in Eurotel. MFDnes writes that, according to the proposed contracts, the new owner will not be allowed to sell part of Cesky Telecom for at least three years.
Separately, TDC yesterday suggested that if the Deutsche Bank/Blackstone Group bid (with which TDC is aligned) is successful, (i) TDC would have to withdraw from Ceske radiokomunikace, and (ii) TDC would not participate in financing the CT acquisition and would provide management services only.
(Ondrej Datka)