US investment fund Apollo has reportedly lodged a bid for the Serbian state’s 58% stake in Telekom Srbija, although it is short of the government’s asking price. One banker questioned how realistic the politicians’ asking price was.
US investment fund Apollo (NYSE:APO) has reportedly offered €1.2bn (US$1.32bn) for the Serbian state’s 58% stake in Telekom Srbija. The bid is less than the €1.5bn (US$1.65bn) asking price, which has reportedly been reduced to €1.4bn (US$1.54bn).
Binding bids are due on 15 November, sources have told TelecomFinance, with Telekom Slovenije among the five shortlisted interested parties.
If successful, Apollo would spend two years turning around the asset before selling it on to a strategic such as Deutsche Telekom, according to Novosti.
“A lot of people see a turnaround opportunity,” noted one banker, who did not expect strategics to be best placed to carry this out.
Other serious interest has however come from Russia’s MTS, which is also prepared to offer over €1bn (US$1.1bn), although the government would reportedly prefer a western buyer.
But despite the process attracting “very motivated bidders, it is more of a question of how realistic the politicians are” in their price expectations, the banker said.
Another hurdle is domestic opposition to privatising a state asset, one of the issues that led to the collapsed sale earlier this year of Telekom Slovenije, which attracted just one bid, from UK private equity firm Cinven.
Spokespeople for the government, Apollo, MTS and Deutsche Telekom were not available by press time.
The telco is 58.11% state-owned, with a further 20% held by the company as treasury stock, and the remainder by Serbian citizens and the telco’s current and former employees.
When the process launched over the summer, Prime Minister Aleksander Vucic said he expected a “significantly higher” offer than the €1.1bn (US$1.21bn) Telekom Austria bid for 51% of the company in 2011.
