The Ministry of Finance said yesterday (after trading had closed) that Finance Minister Jiri Rusnok will try to put Ceske radiokomunikace privatization on the agenda for today’s Cabinet meeting. The Cabinet should decide this morning (the meeting starts at 10 a.m. CET) whether to discuss the issue or not. According to the MFDnes newspaper, the Finance Ministry will propose two options regarding Ceske radiokomunikace to Cabinet. The first option, reportedly supported by the ministry and recommended by the government’s privatization advisor, is to approve the sale of the state’s 51% stake to the TDC/Deutsche Bank consortium. (The price for such a sale is not known, in the past the government insisted on receiving at least USD 300 mil., or CZK 740 per share, and at one point the consortium was offering USD 225 mil., or CZK 555 per share, but few consider these numbers as relevant at present). The second proposed option is that the Cabinet cancels the tender, and then the ministries of finance and transport prepare a completely new privatization plan by the end of this year.
A press conference on the results of the Cabinet meeting is scheduled for 5 p.m. CET, but the government spokesman sometimes makes interim comments to the press during the course of the day.
We think that there is an above-50% chance of the Cabinet discussing the issue and approving a purchase deal today. The market response to this would be positive (unless the deal price is at or only slightly above the current market price), and the stock might gain this morning in anticipation of such an outcome. In case of another postponement, or in the case of an outright cancellation of the current tender, the market response would likely be negative.
(Ondrej Datka)