The Serbian government has given Telekom Austria 15 days to improve its bid for a 51% stake in Telekom Srbija.
Telekom Austria was the sole candidate which submitted a bid on March 21 after other parties pulled out because they considered the minimum…
The Serbian government has given Telekom Austria 15 days to improve its bid for a 51% stake in Telekom Srbija.
Telekom Austria was the sole candidate which submitted a bid on March 21 after other parties pulled out because they considered the minimum price of E1.4bn as too high.
However, it only made a conditional bid of E800-950m for the stake and said that its offer was ‘subject to negotiations with the government about certain value creating conditions that will result in an expected enterprise value/adjusted EBITDA 2011 multiple of approximately 4.8x.
The offer also included a commitment to capital expenditures of E450m over a three year period.
In addition to the financial offer improvement, the Serbian authorities are also asking for supplementary documentation.
In response, Telekom Austria said that it would analyse the requirements in detail, while also reiterating that the conditional offer was ‘dependent on Serbian merger control clearance for market consolidation and subject to negotiations with the government about certain value creating conditions.’
Telekom Austria won a dual GSM/UMTS licence in Serbia in November and Vip Mobile launched operations in July 2007. It said that in 2010 its subscriber base grew by 17.8% to 1.4 million customers, representing 13.7% market share. It competes with Telekom Srbija’s MTS and Telenor Serbia.
Serbia owns 80% of the telecoms incumbent, while Deutsche Telekom-owned OTE controls the rest.
The authorities are advised by Citigroup, while Telekom Austria is advised by Bank of America Merrill Lynch and Raiffeisen Investment.
