Telekom Austria’s (TA’s) management and supervisory boards have refrained from giving an explicit recommendation on America Movil’s (AMX’s) up to €1.4bn (US$1.9bn) public takeover offer.
The management board said in a statement that no clear…
Telekom Austria’s (TA’s) management and supervisory boards have refrained from giving an explicit recommendation on America Movil’s (AMX’s) up to €1.4bn (US$1.9bn) public takeover offer.
The management board said in a statement that no clear assessment of the €7.15 (US$9.80) per share offer price can be drawn. Its own valuation of the company depends greatly on the future development of the markets, it said.
The board said the offer price falls within its own valuation range, although its planning assumptions support a higher price per share. These assumptions include a belief that there will be sustained market recovery in the core markets of Austria, Bulgaria and Croatia.
The board is also confident the implementation of strategic targets, which include convergence, and economic recovery in Southeast Europe also support a higher price. However, the board noted that even slightly delayed market recovery would result in an enterprise value lower than the offer price.
The board also pointed out that prior to the disclosure of the offer price, external analysts estimated the Austrian incumbent’s market value per share to be “partly higher and partly lower”.
Required under Austrian takeover law to present its views on the offer, the management board detailed criteria which it said “should certainly be considered as arguments in favour of or against acceptance by individual shareholders of their assessment of the offer”.
However, the board said each shareholder must decide on its own whether the offer is beneficial.
“In summary, the management board of Telekom Austria establishes that it acknowledges the offer and the business political goals and intentions of the bidder, supports them and is neutral about the offer …”
The supervisory board said it agrees with the management board statement, declining to provide a full statement of its own.
BDO Austria, mandated by TA to provide an expert opinion on the offer, concluded that it is lawful, adding that it considers the boards’ reasons for and against accepting it as “feasible, reasonable and coherent”. The reasons provide a “suitable basis” for TA shareholders to evaluate the offer for themselves, the firm added.
“Furthermore we are convinced that the offer price is within a plausible bandwidth which has been calculated by the target company.”
Carlos Slim’s AMX and Austrian state holding OeIAG inked a shareholders’ pact in April which pooled their respective 26.4% and 28.4% stakes, triggering a mandatory takeover bid under Austrian law. Mexico-based AMX launched the public tender offer for all outstanding shares earlier this month and TA shareholders have until 10 July to accept.
24% of TA shares to remain listed – AMX CFO
AMX CFO Carlos Garcia Moreno told Austria’s News magazine that the company will buy every TA share tendered but intends to keep 24% listed on the Vienna Stock Exchange.
“If we get more than 50% of the shares, we will sell as many shares as necessary within two years to ensure this free float,” he was quoted as saying.
Under the terms of the shareholders’ agreement, OeIAG’s stake in the Austrian incumbent will drop to a blocking minority of 25% plus one share. However, the state holding has the right to nominate the telco’s CEO and supervisory board chairman. The agreement runs for 10 years with a possible five-year extension and will see AMX take on operational responsibilities at TA once the necessary approvals are in place. The Mexican telco will also have most TA supervisory board seats and Moreno reportedly said he would personally be pleased to have one.
AMX and OeIAG have also agreed to support a €1bn (US$1.38bn) capital increase at the Vienna-based telco.
In the interview, Moreno said AMX expects EU regulatory changes to support consolidation in the European telecoms sector, presenting opportunities to TA to grow and make acquisitions.
He said TA is particularly in need of more fixed-line assets in markets outside Austria, noting that, in its home market, its mobile and broadband offerings help to distinguish it from rivals.
Austrian competition review extended
Meanwhile, Austria’s Federal Competition Agency (BWB) has extended its review of the shareholders’ agreement by a fortnight, setting a new deadline of 10 June.
A spokesperson for the regulator said the extension was agreed with the parties, adding that it will look at the agreement within the context of the “very concentrated telecoms market” to ensure fair competition.
Two other Austrian regulators are also reviewing the deal, namely telecoms authority TKK and the Financial Markets Authority.
TA is the largest of Austria’s three mobile operators, followed by Deutsche Telekom’s T-Mobile and Hutchison Whampoa’s 3.
