Telekom Austria (TA) reportedly looks likely to withdraw from the bidding for cableco Serbia Broadband (SBB) because of financing issues.
The Austrian incumbent is concerned it may not have sufficient funds for the deal in the wake of the Austrian…
Telekom Austria (TA) reportedly looks likely to withdraw from the bidding for cableco Serbia Broadband (SBB) because of financing issues.
The Austrian incumbent is concerned it may not have sufficient funds for the deal in the wake of the Austrian spectrum auction, Reuters quoted a source close to the matter as saying.
While the results of the Austrian auction, likely to cost TA several hundred million euros, are expected next week, binding bids for SBB are due today, the report stated.
SBB, in which PE firm Mid Europa Partners has a majority stake, has been valued at up to €1bn (US$1.3bn).
A TA spokesperson declined to comment on the matter.
The telco, in which Austrian state holding OeIAG and Carlos Slim’s America Movil (AMX) are the largest shareholders, adopted a convergence strategy in 2009 which has seen it acquire several cable and satellite companies. TA CEO Hannes Ametsreiter told an Austrian paper in mid-July that both SBB and Croatia’s H1 Telecom are of interest to the company.
Meanwhile, Austrian newspaper Der Standard reported in late August that TA was planning a €500m capital raise to fund its participation in the auction and potential acquisitions in the CEE region. According to the paper, AMX would participate in the increase in order to avoid diluting its 23.7% stake.
A sector banker said TA is unlikely to submit a binding bid for SBB in light of the uncertainties surrounding auction costs and the potential difficulties of a capital increase. In his view, it is unclear yet which company will emerge as the final buyer, although he said the PE firms may be offered greater incentives.
Rival suitors for SBB reportedly include private equity firms Providence Equity Partners, Cinven Advisers, KKR, and Altice Finco. US cable giant Liberty Global’s European arm UPC is also said to have entered the race recently.
