Telefonica has reportedly mandated two banks for the sale of its majority stake in Telefonica Czech Republic.
The Spanish telecoms group has hired Goldman Sachs and Societe Generale to help it find a buyer for the 69% stake, which has a market value of…
Telefonica has reportedly mandated two banks for the sale of its majority stake in Telefonica Czech Republic.
The Spanish telecoms group has hired Goldman Sachs and Societe Generale to help it find a buyer for the 69% stake, which has a market value of about US$3.6bn, Bloomberg reported citing three unnamed people familiar with the matter.
Telefonica aims to raise cash for further industry consolidation, the report stated.
Spokespeople for Telefonica, the Czech unit, which operates under the O2 brand name, and the two banks declined to comment.
Speculation that Telefonica, working to cut net debt from €51bn to €47bn by the end of the year, is considering selling its stake in the Czech unit has continued for some time. A private equity firm or new market entrant is widely tipped to emerge as the most likely buyer as existing operators could encounter regulatory issues.
Vladimir Evtushenkov, the billionaire founder of Russia’s Mobile TeleSystems (MTS), named Telefonica CR as a potential takeover target in an interview earlier this year. Evtushenkov, the major shareholder and chairman of MTS’ majority shareholder Sistema, said at the time he was eyeing acquisition opportunities within and outside Russia, also naming Tele2 Russia as a potential target.
Meanwhile, an industry adviser with knowledge of Czech telecoms suggested that PPF, the investment group controlled by billionaire Petr Kellner, might seek to acquire a local operator to enter the market.
PPF participated in the country’s cancelled spectrum auction earlier this year. It recently confirmed it will not take part in the upcoming auction because rules effectively block a new operator from merging with an existing one for the 15-year term of the licence.
Telefonica has voiced strong objections to the auction, filing a lawsuit in connection with it at the Municipal Court of Prague. The telco opposes several of the auction conditions and argues that the regulator failed to carry out a proper analysis of the market before launching it.
Telefonica acquired the majority stake in the Czech Republic’s largest telco, then called Cesky Telecom, from the state for about US$3.6bn. In September, Telefonica CR and Deutsche Telekom’s T-Mobile CR announced that they were discussing consolidating their 2G and 3G networks. The companies said they aim to close the deal by the end of the year.
Telefonica CR, which also operates in Slovakia, reported revenues of €930m for the first half of 2013, down 8% year-on-year. At the end of June, the company said it had 5.1 million local mobile customers, 1.4 million local fixed-access lines and 1.4 million mobile customers in Slovakia.
