Slovakia pulls IPO of Slovak Telekom

By bne IntelliNews May 7, 2015

bne IntelliNews -

 

Slovakia has decided to give up the initial public offering (IPO) of its 49% stake in Slovak Telekom after it received a better offer from a strategic investor, Finance Minister Peter Kazimir announced on May 7.

The IPO would have generated an estimated €750mn for the country’s stake, the lower end of the planned price range, Kazimir told a news conference. Slovakia was hoping to cash €1bn for its minority stake in the telecom operator. However, analysts had previously warned that Bratislava’s plan could prove too optimistic.

"As we always try to be good managers, we decided to reject the offer generated on the stock exchange," Kazimir said adding that “more is more”.

Slovak Telekom (ST) initially set an indicative price range of €17.7-€23.6 per which implied a valuation of €1.5-2bn. However, unnamed sources told Reuters on May 6 the price range had tightened to €17.7–€19.50 per share.

Kazimir did not name the strategic investor who placed the better offer, but sources familiar with the matter told Reuters it was Deutsche Telekom, the holder of a controlling 51% in the company. DT, which holds the pre-emptive rights, however, declined to make any comments.

The German telecom operator has resisted efforts by Bratislava over several years to tempt it to buy the remaining shares. Former Economy Minister Pavol Pavlis said in February the government has not received “any official offer for talks" despite a series of unofficial talks. 

ST offered up to 42.34mn shares in the IPO in the form of shares and GDRs on the Bratislava and London stock exchanges. Citigroup and J.P. Morgan acted as joint global co-ordinators and joint bookrunners. Erste Group and Wood & Co acted as joint lead managers

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).

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.

The purchase of the remaining stake in ST would be in line with the company’s goal to grow in Europe. In February, the company’s CEO, Timotheus Hottges, said: "Growth is our top priority. With massive investments in our networks, we are forging ahead toward becoming the leading European telecommunications provider.”

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