PPF claims no plan to delist O2 Czech Republic

By bne IntelliNews June 19, 2015

bne IntelliNews -


PPF does not plan to delist the recently split telecommunications company O2 Czech Republic despite launching a buyout offer, the CFO of the closely-held financial group said in comments published on June 19. 

 PPF is offering CZK78 (€2.9) for each share in O2 CR and CZK176 for each share in Cetin, the new infrastructure holding controversially spun off from the telecom earlier this year. The offer is valid until July 13. 

Although the strategy is still under discussion, the investment group wants to keep O2 CR shares on the Prague Stock Exchange, Katerina Jiraskova told Hospodarske Noviny in an interview. The CFO said the group is seeking to squeeze out minority shareholders at Cetin and integrate the unit within PPF. Cetin is not listed. 

The news that PPF plans to retain a listing for O2 CR is somewhat of a surprise. Investors have been wary ever since PPF bought a 65.9% stake in the Czech Republic's biggest telecom from Spain's Telefonica in early 2014. The secretive financial group - owned by the country's richest man, Petr Kellner - has since raised its holding to around 83%. 

PPF is now offering to buy all shares in O2 CR, as well as in Cetin. In the meantime, however, it offered little information to the market over its intentions or strategy at either. 

In April, PPF O2 forced through approval of the first ever voluntary split of a major telecom in Europespin, as it spun off the mobile and fixed-line infrastructure into Cetin. O2 CR shares, already under pressure due to other rough handling of minorities by Kellner, promptly plunged. 

O2 CR will now run voice and data services. Speculation abounds that Kellner is trying to seal a deal with government officials that will see Cetin benefit hugely from the next round of EU funding. 

PPF's latest combined offer - CZK254 for shares in both O2 CR and Cetin - is CZK76 crowns above O2 CR's share price ahead of the split, PPF has said. A brief suspension in trading in O2 CR shares followed the spin off, but the Prague bourse quickly re-opened trading on June 1, with a reference price of CZK49.40. 

The shares in the company nearly doubled in value to CZK96 in mid-afternoon trade on June 19, unchanged from previous close. A handful of other Czech oligarchs boasted that they made a killing by buying up the stock during the break on the bourse, suggesting some information may have leaked to a select few. 

Minorities have been nervous about PPF ever since it bought into the company, with the financial group unused to having the oversight of shareholders. They had previously become used to high dividends. Jiraskova said future profit payouts would depend on earnings and strategy. 

Meanwhile, a group of shareholders has launched a legal challenge to the spin off, claiming the vote was carried out incorrectly, meaning the approval is invalid. Questions have also been raised over the actions of the Prague Stock Exchange and central bank regulators.

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