15 suitors for Telekom Slovenije

2 Oct 2007

The government of Slovenia has received 15 applications from telecoms firms and equity funds to bid for a 49.13% stake in incumbent telco Telekom Slovenije, and has granted ‘registered bidder’ status to: Sistema (owner of largest Russian cellco MTS); Croatia’s T-Hrvatski Telekom (T-HT, majority owned by Deutsche Telekom); Magyar Telekom of Hungary (also controlled by the German incumbent); UAE-based holding company Oger Telecom (parent of Turk Telekom amongst others); Luxembourg-registered Skywheeler (a unit of international private equity house Permira); UK-based fund Providence Equity; Slovenian retailer EngroTus (part of a group owning Tus Telekom [Voljatel] and Tus Mobil); Macquarie Bank of Australia; Luxembourg-US buyout fund CEP III (operated by equity house The Carlyle Group); UK-German consortium Bain Capital & Axos Capital; international investment group Apax; Iceland’s Skipti (parent of incumbent telco Simmin); investment firm Babcock & Brown of the UK, the US’s SAC Private Capital Group; and Telecom Egypt.

To proceed further in the tender, the registered bidders must submit non-binding offers by a 15 October deadline. Selected bidders will submit binding bids on the basis of due diligence in the second phase of the privatisation, ahead of a third and final phase, an auction. The selected buyer will then have to publish an offer for the acquisition of the remaining Telekom shares, in line with the country’s Acquisitions Act and other legislation. While the state has the option to offload the entire 49.13% stake at once, it can also opt for selling an initial 35.13% and 14% later. In line with its privatisation strategy, the state intends to keep 25%-plus-one-share (ie a golden share) in the telco. The Republic of Slovenia directly owns 62.5% of Telekom Slovenije. Funds and others (including brokerage firms and investment companies) hold around 27%, whilst around 10.5% is held by private investors. Taking into consideration the state funds KAD and SOD, the government indirectly controls around 74% of Telekom.