Cinven confirms it is sole bidder for Telekom Slovenije

By bne IntelliNews April 16, 2015

bne IntelliNews -


UK-based private equity firm Cinven confirmed on April 16 that it has submitted the sole bid in the tender for the sale of 72.75% of Telekom Slovenije. Slovenian Sovereign Holding (SDH), which is in charge of the sale, said on April 13 that only one offer was submitted but did not provide the bidder's name.

Local media, however, reported the same day that the sole bid was filed by Cinven, speculating that its offer is considerably lower than anticipated and below the current market price of the telecom. The government had been reportedly eyeing €1.6bn from the sale of the majority stake in Telekom Slovenije.

As a result of the speculation Telekom Slovenije shares have lost more than 7% of their value since the start of this week to close at €120 on April 16.

Cinven did not reveal the price it has offered for the telecom in an April 16 statement. "Pursuant to the rules of the privatisation process, Cinven is not prepared to comment on the value offered for the government's stake in the business and the implied value in relation to 100% of the company."

The private equity firm added it was discussing the bid with the SDH's advisors and "is looking forward to concluding a transaction on mutually agreeable terms".

It said it intends to make significant investments in upgrading Telekom Slovenije's network and pledged to stop its revenue decline and bring the company to the path of stable revenue growth in the long term.

In particular, Cinven plans to invest in fibre-optic networks in order to offer high-speed broadband across Telekom Slovenije's fixed network, as well as in sales channels and customer service to reverse the decline in market share in recent years. It also intends to increase the 4G coverage to cover 90% of the population.

"We believe that these investments will be beneficial to the Slovenian economy and broader society, and they will create sustainable employment growth," the private equity firm said. "We believe that Telekom Slovenije represents an attractive, although challenging, investment opportunity, which fits well with Cinven's experience in the telecoms sector."

Cinven noted it is one of the leading investors in telecoms in Europe, participating in the market consolidation in both France and the Netherlands, where it is a long-term investor. It has invested in telecoms transactions valued at over €10bn.

Telekom Slovenije's consolidated net profit plunged to €1.6mn last year from €51mn in 2013 as the company had to set aside additional provisions worth €43.6mn. In 2015, the company expects a consolidated net profit of €66mn and has earmarked €107mn for investments.

The group comprises the Telekom Slovenije operator and several other companies in Slovenia, plus Kosovo's Ipko Telecommunications, Blicnet and Siol in Bosnia and Herzegovina, One and Digi Plus Multimedia in Macedonia, and several smaller firms in Montenegro and Croatia.

Telekom Slovenije is the largest on the list of 15 state-controlled firms that Ljubljana plans to sell under a major privatisation plan adopted in June 2013. 

Since Telekom Slovenije is one of the most valuable companies in state hands, its privatisation has been in the public eye ever since the process was launched. Political parties, including those in the governing coalition, have been divided over the fate of the company and whether it should be allowed to go into foreign hands.

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