The DBG Osteuropa Holding private equity fund revealed yesterday that it sold (in a transaction some time ago) its 100% stake in Czech On Line (COL), the biggest Czech dial-up Internet service provider with estimated 150,000 users, to Telekom Austria for USD 220 mil. Such a valuation of COL is very aggressive, given that free Internet access is the main business model employed by COL. This revelation could theoretically make people more bullish in terms of valuation of the Internet businesses of the listed Cesky Telecom and Ceske radiokomunikace (Internet On Line and Contactel, respectively), though we would advise against using the COL transaction as a benchmark valuation. In reality, the two listed telecom stocks will likely be unaffected by the news today and will rather move with the rest of the market.
(Ondřej Daťka)