Deutsche Telekom has agreed to acquire the 49% of Slovak Telekom it did not already own for €900m, in an offer made the eve of a scheduled IPO.
The German incumbent said the offer represented a multiple of 3.8x EV/EBITDA. The shares are currently…
Deutsche Telekom has agreed to acquire the 49% of Slovak Telekom it did not already own for €900m, in an offer made the eve of a scheduled IPO.
The German incumbent said the offer represented a multiple of 3.8x EV/EBITDA. The shares are currently owned by the National Property Fund (NPF) of the Slovak Republic.
The transaction is not subject to regulatory approvals and is expected to complete in the coming weeks, it said.
Morgan Stanley and Clifford Chance advised Deutsche Telekom.
Indicative pricing for the listing had been set at €17.7-€23.6 per share, and when the offering closed last week, the price had reportedly settled towards the bottom end of that range.
A valuation of €17.7 per share would have meant the NPF could have expected proceeds of around €750m for its 42.3 million shares. The German giant’s offer was €150m more than that meaning it was too good to turn down. Despite the premium, Deutsche Telekom is still paying less than €1bn the stake would have been valued at had it priced at the top of the range.
Citigroup and JP Morgan advised NPF on the privatisation process as a whole. Erste Groupand Wood & Co were also working on the IPO before it was cancelled.
Describing the Slovak Telecom as the country’s only quad-play operator, Claudia Nemat, Board Member for Europe and Technology at Deutsche Telekom said it was the market leader in fixed line, fixed broadband and pay-TV, as well as the second largest mobile player. She added that it is the second DT subsidiary to offer an all-IP network, and now also provided converged fixed/mobile services.
DT said the acquisition would enable it to simplify the capital and governance structure of Slovak Telekom, while also eliminating cash leakage from dividend pay-outs to minority shareholders.
The buyer said the transaction would have no impact on group revenue and EBITDA, but that it would lead to an increase in earnings per share for Deutsche Telekom shareholders. It added that it had agreed to set aside €100m of the purchase price in an escrow account for a specific time period.
