Telefonica O2 CR: Looking for a new advisor to sell its property portfolio

Telefonica O2 CR (Tef O2 CR) started to search for a new advisor for the tender to sell some of its real estate assets. The company terminated the cooperation with the previous advisor JP Morgan. Tef O2 CR should receive proposals from potential new advisors in the second half of July. The company began to sell its real estate portfolio already at the end of 2004 and comprised 437 buildings.

Our view:
As some part of its portfolio has already been sold, some 400 buildings could still matter in the tender. The book value of the portfolio is CZK 8.3bn and is one of the biggest sell of the real estate property in past years. We see the news as neutral at the moment, however reducing company’s buildings is a good way to increase cash flow and decrease G&A costs. For the moment we reiterate our Hold recommendation.