The Czech government has approved the sale of its 51.1% stake in the fixed line operator Cesky Telecom to the Spanish company Telefónica. Last week, Telefónica had its CZK82.6 billion (EUR2.7 billion) bid accepted by the country’s privatisation commission and all 18 government ministers have now voted to accept the commission’s recommendation. The only condition imposed by the government is that a state representative be appointed to Cesky Telecom’s board for at least three years. The deal is expected to be completed during the first half of this year, with the Spanish telco then launching a mandatory offer to buy up shares from Cesky’s minority shareholders.
Meanwhile, local press reports say that Cesky Telecom’s management are in line for a CZK300 million windfall as a result of the privatisation. Czech newspaper Hospodarske Noviny claims 34 senior executives will receive the performance bonuses which are tied to the company’s market valuation; this has more than doubled over the past 15 months. Cesky Telecom is the largest wireline operator in the Czech Republic and is also the sole shareholder in the number one cellular operator, Eurotel Prague.