Slovak Telekom valued at up to €2bn by indicative IPO price

By bne IntelliNews April 21, 2015

bne IntelliNews -

 

Slovak Telekom (ST) has set an indicative price range of €17.7-€23.6 per share for the initial public offering of the Slovak state's 49% stake in the telecom operator, the company announced on April 21.

ST will offer up to 42.34mn shares in the form of shares and GDRs on the Bratislava and London stock exchanges. The price range on the GDRs runs from $19.0 to $25.3, and the offer seeks to raise a total of up to €1bn. The price range implies a valuation of €1.5-2bn.

Subscription for institutional investors starts on April 21 and is scheduled to close on May 6, while the retail offering should start on April 22 and close on May 5. Pricing and allocations are expected to be announced on May 7.

Up to 10% of the offer is expected to be allocated to retail investors in Slovakia and the Czech Republic. Retail investors in Slovakia that submit early orders will be offered a 5% discount as well as preferential allocation on orders for up to the first 423 shares.

Citigroup and J.P. Morgan are acting as joint global co-ordinators and joint bookrunners. Erste Group and Wood & Co are acting as joint lead managers.

“We look forward to meeting prospective investors over the coming weeks to share our plans to leverage our network advantage in the Slovak telecoms market to capitalise on the growth potential we see in high speed broadband, Pay-TV, ICT and mobile data by bundling and cross-selling premium services and content to our large subscriber base,” Slovak Telekom CEO Miroslav Majoros said in a statement.

The controlling 51% stake in ST is held by Deutsche Telekom. The German company has resisted efforts by Bratislava over several years to tempt it to buy the remaining shares. Officials said earlier this year that they had failed to whip up serious interest from other strategic investors. Deutsche Telekom is not offering any shares in the offering and plans to retain its full stake.

Slovakia has said it might use the proceeds from the sale of its holding in ST to strengthen its position in power producer Slovenske Elektrarne (SE). The economy and finance ministries have been recently ordered to submit proposals on whether the country should try to buy a stake in SE from the 66% put up for sale by Enel in the summer. Bratislava currently holds the remaining 34% in Slovakia's main power producer.

However, tensions between the Slovak government and Enel have intensified lately and might suggest Enel’s plan to sell its Slovak assets has come to an end. In this case, funds from the ST sale are likely to be used to cover the country’s financing needs for 2015.

Slovak Telekom Group revenue dropped 15% to €768mn last year, while the number of ST’s mobile subscribers fell 1.9% to 2.22mn at end-December. ST competes on the local market with France Telecom’s Orange, the country’s biggest operator, and O2, owned by Czech investment group PPF.

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