Stockholm-based telco Tele2 is eyeing distressed assets and spectrum M&A possibilities across Eurasia after selling its Russian operations for US$3.55bn.
CEO Mats Granryd said such opportunities are out there, but the company remains “quite picky”…
Stockholm-based telco Tele2 is eyeing distressed assets and spectrum M&A possibilities across Eurasia after selling its Russian operations for US$3.55bn.
CEO Mats Granryd said such opportunities are out there, but the company remains “quite picky” about its acquisitions.
He said: “We are being cautious with our money. We’re not here to put the Tele2 flag on each and every country of Europe.”
Instead, Granryd said the company looks more at what value it can add in a new country, although it needs to be a “decent sized” market to begin with.
“We have said internally that there needs to be at least five million people living there, with good GDP growth – preferably with as few operators as possible with a healthy price level for those services,” he added.
“And there are those countries around. So we are being very cautious yet we’re looking at all different countries in Europe, Eastern Europe and Eurasia.”
Tele2 has been on the look out to expand its Eurasian footprint for sometime, but its recent multi billion dollar sale has prompted a flurry of speculation that it could be set for a shopping spree.
A spokeswoman declined to comment on the rumours but said that, even after using sale proceeds to reduce debt and pay dividends, it will “still have a very strong balance sheet”.
However, Scandinavian sources have recently poured cold water over the prospect of Tele2 embarking upon sizeable acquisition deals.
Among the inhibitors is a lack of potential targets, according to one TMT banker, who said that Finnish operator DNA could present an opportunity but even then there was a risk of being outmuscled by private equity.
One analyst pointed to Tele2’s sizeable SEK12.5bn (US$1.92bn) dividend as an indication that a vast swathe of proceeds from the Russian sale were being given to stockholders because of a lack of opportunities.
Tele2 posted SEK7.3bn (US$1.1bn) in net sales for Q1 2013, compared with SEK7.4bn for the corresponding period last year. Q1 2013 EBITDA was broadly flat on the year at SEK1.5bn (US$229m).
