Telefonica is reportedly close to announcing a deal to sell its majority stake in its Czech unit to investment group PPF for about €2.5bn (US$3.4bn).
The deal could be finalised as soon as today and an official announcement is expected early this…
Telefonica is reportedly close to announcing a deal to sell its majority stake in its Czech unit to investment group PPF for about €2.5bn (US$3.4bn).
The deal could be finalised as soon as today and an official announcement is expected early this week, the Financial Times reported citing two people familiar with the matter.
PPF, founded by Czech billionaire Petr Kellner, may then launch a tender offer for the remaining 31% of Telefonica Czech Republic listed on the Prague Stock Exchange, according to the report. This could boost the value of the deal to take the company private by €1bn.
PPF declined to comment, while Telefonica was not immediately available.
The Spanish incumbent and PPF, which invests in multiple markets across Central and Eastern Europe as well as Asia, announced in mid-October that they were in talks about the former’s 69% stake in Telefonica CR.
A news agency report last week said the deal is unlikely to include a premium on its current share price, but rather future, staggered, performance-rated payments. Telefonica CR has a market value of €3.9bn (US$5.3bn).
Telefonica is said to have hired Goldman Sachs and Societe Generale to manage the sale process.
A banking source familiar with the Czech telecoms sector recently told TelecomFinance that Telefonica and PPF have been in talks for some time, but initial discussions collapsed over price. According to the source, the parties resumed talks a few weeks ago and are now very close to an agreement.
PPF, well known for not overpaying for assets, could use the possible entry of a fourth player into the Czech mobile market via its upcoming spectrum auction as a bargaining tool to drive down the price.
Telefonica, working to cut net debt from about €51bn to €47bn by the end of the year, has made numerous disposals and acquisitions recently. The Madrid-based telco agreed to sell its Irish unit to Hutchison Whampoa for €850m earlier this year, which is awaiting antitrust clearance from the European Commission (EC).
Telefonica has also agreed to increase its stake in Telecom Italia’s controlling shareholder group, Telco, through a €441m investment, and to acquire KPN’s German unit E-Plus for €8.55bn. The latter deal is also awaiting clearance from the EC.
