Polish telco Netia’s billionaire largest shareholder, Zbigniew Jakubas, has said he would like the company to consider a tie-up with mobile operator P4 (Play) to boost revenue growth.
Jakubas, who reportedly wants to increase his indirect 23% stake in…
Polish telco Netia’s billionaire largest shareholder, Zbigniew Jakubas, has said he would like the company to consider a tie-up with mobile operator P4 (Play) to boost revenue growth.
Jakubas, who reportedly wants to increase his indirect 23% stake in the fixed-line operator, told Reuters “the dream” is to acquire another telco.
He described Play – the smallest of Poland’s four mobile network operators – as a “very interesting asset”, adding that it is a potential partner for cooperation “in a variety of capital scenarios”.
A spokesman for Netia said he would not like to “pre-empt any such discussions” at present as the company is in the process of updating its strategy, which is set to be released to the market in October.
However, he noted that the Polish TMT market is “prone” for consolidation, adding that “all equity scenarios are possible”.
Play declined to comment.
Konrad Ksiezopolski, an analyst with Espirito Santo in Poland, said a tie-up between Netia and Play is possible given their relationship history and complementary businesses, noting that such a scenario has been discussed previously.
Netia was among Play’s first shareholders but, in 2008, sold its 23.4% stake to current owners Greek investment fund Tollerton and Icelandic businessman Thor Bjorgolfsson’s Novator. Tollerton now has a 50.3% stake in Play while Novator owns the remainder.
Netia and Play currently share an office building and cooperate to some extent, with Netia using Play infrastructure to offer mobile services.
Play is rumoured to have considered both M&A options and a listing in the past, but Ksiezopolski said its high debt levels and limited room for capital expenditure on growth make it an unlikely IPO candidate.
“Such huge leverage is often used to merge with a low-indebted entity and Netia matches this criteria and also has a competitive fixed-line offer,” he said.
Netia has long been considered a potential takeover target itself, with some observers speculating that the company’s recent plan to divide its personal and corporate client sectors will lead to a sale by its largest shareholders.
In addition, recent stake increases in Netia by companies connected to Jakubas have prompted analysts to speculate that consolidation within the Polish telecoms sector may be drawing nearer.
Analysts with PKO Securities in Poland said they believe Jakubas may in future be interested in selling his Netia shares to an industry player. In their view, local media and telecoms group Cyfrowy Polsat, which recently merged with mobile operator Polkomtel, could consider bidding for Netia to strengthen its position in the fixed-line segment.
In their view, Cyfrowy could make such a move in two to three years’ time after it reduces its debt.
Cyfrowy, controlled by Polish businessman Zygmunt Solarz-Zak, has previously been named as a potential buyer for Netia’s business-to-business operations. Ksiezopolski said a Cyfrowy bid for Netia’s B2B business is also possible, but “there are a few options on the table”.
“There are a few telecoms/cable operators in the market which could potentially be interested in the Netia asset.”
Raiffeisen analyst Dominik Niszcz said all Polish MNOs other than Orange Polska could potentially be a good M&A match for Netia as they do not own significant wireline infrastructure. While T-Mobile has recently bought CEE-focused fixed-line operator GTS, a Netia acquisition would create further synergies, he said.
Niszcz noted that Netia and Play previously severed ties because of a lack of synergies, but said it may make sense for them to cooperate now that bundled offers are becoming increasingly important globally.
Polish cabelco Vectra abandoned a bid for a stake in Netia in August, having failed to reach its 33% target during the share tender process.
Netia has a market cap of PLN1.96bn (US$620.5m) on the Warsaw bourse. It is Poland’s second-largest fixed-line telco behind Orange Polska.
