Deutsche Telekom (DT) is close to dropping out of the sales process for GTS Central Europe because of pricing, Reuters reported citing sources with knowledge of the matter. The German incumbent, which owns Poland’s third-largest mobile operator…
Deutsche Telekom (DT) is close to dropping out of the sales process for GTS Central Europe because of pricing, Reuters reported citing sources with knowledge of the matter.
The German incumbent, which owns Poland’s third-largest mobile operator T-Mobile Polska, has been unable to agree a price with GTS’ private equity owners, a sector banker not directly involved in the talks suggested to TelecomFinance.
According to the banker, DT’s interest in GTS, which provides phone and internet services to businesses throughout the region, has waned. The German telco’s prime interest in Polish targets is another factor, he said. While GTS operates in Poland, it also has core operations in the Czech Republic, Hungary, Romania and Slovakia.
German media recently reported that DT was close to reaching an agreement to buy GTS for about €500m (US$674.8m). Manager Magazin reported that the Bonn-based telco was “largely in agreement” with the target’s private equity owners, which include Columbia Capital, M/C Venture Partners, Innova Capital, HarbourVest Partners, Oak Investment Partners and Bessemer Venture Partners.
However, Reuters has since cited sources as saying Innova Capital rejected DT’s offer and that the deal has been called off for the time being.
DT, GTS and Innova Capital have declined to comment on the matter.
US telco Level 3 Communications has also reportedly submitted a bid for GTS, while the CEO of Polish telco Netia, Miroslaw Godlewski, told reporters in August that his company has always considered GTS an interesting takeover target.
Meanwhile, the banking source said DT had also looked at Petr Kellner’s PPF financial group which, until recently, was expected to enter the Czech mobile market. PPF took part in the Czech Republic’s cancelled auction earlier this year but recently confirmed it would not participate in the new, upcoming auction.
As a result, DT’s interest in PPF has waned in light of its changed mobile strategy, the source said, adding that the German telco is likely to review its options in the region.
Earlier this month, Miroslav Rikowski, CEO of DT’s Polish unit T-Mobile Polska said the company is eyeing potential fixed-line targets in Poland. While he declined to name targets, he said those being considered could be counted on one hand.
Poland’s main fixed-line operators are Telekomunikacja Polska (Orange), Netia, GTS Poland and Telekomunikacja Kolejowa.
