OTE launches EUR2.83 billion bid to absorb Cosmote

12 Nov 2007

Greek former monopoly telco OTE has announced that it is launching a voluntary tender offer for the 32.17% of shares that it does not currently own in its mobile arm Cosmote. OTE’s offer for 107,695,259 shares at EUR26.25 (USD38.54) per share (a total cost of EUR2.83 billion) is 12.5% above the average price in the last three months and 13.8% above the average price in the last six months. OTE stated that once it holds 90% or more it will exercise its ‘squeeze out right’ and will continue to buy Cosmote shares through the market for three months, ahead of an EGM seeking approval for the stock’s delisting. The planned buyout will be through the 1:1 exchange of OTE shares for Cosmote shares. The tender offer is subject to the approval of the Capital Markets Committee, following which the dates of the offer will be announced. OTE wants to merge with Cosmote to help offset a decline in its traditional fixed line customer base caused by mobile substitution and the effects of Greek telecoms market liberalisation in 2001.

Greece, Cosmote, Cosmote (old)