The National Property Fund will this morning release information on the number of preliminary bids for Cesky Telecom submitted by yesterday’s deadline (bidders’ identities will likely not be released). Reuters quoted an industry source last night as saying that there were five bids, both financial and strategic.
Separately, Wall Street Journal reports that Orange (France Telecom) confirmed making a bid, and that at least two other telecom companies submitted bids (Deutsche Telekom, which was named by WSJ, declined to confirm any bid, according to the report; according to a Reuters’ report, Vivendi Universal “has been tipped as possibly interested”). Other bidders were a consortium of Warburg Pincus, Doughty Hanson and Apex Partners, and a consortium of CVC Capital Partners and Spectrum Equity Partners. The number of bids implied by this report (three telcos, two financial investors) corresponds to the Reuters’ report of five bidders.
The final number of bidders will be paired down, since financial bidders can bid only in consortia with strategic bidders. In this sense, five preliminary bids is not a particularly encouraging number. However, the participation of the telcos is of key importance, and suggestions of three telcos as bidders for CT roughly corresponds to our expectations, particularly if Vivendi and Deutsche Telekom confirm their participation in the tender.
The government will begin negotiations with the bidders within two weeks; the winning bid is due to be selected by the end of March. Government officials have made it clear that the tender shall be canceled if the bid levels are not satisfactory.
At this stage, we find the information rather neutral for the stock.
(Ondrej Datka)