RCS&RDS linked with UPC Romania acquisition

28 Feb 2011

According to business daily Ziarul Financiar (ZF), Romania Cable Systems (RCS&RDS) is close to acquiring cableco UPC Romania from US group Liberty Global Inc (LGI); a price-tag of around USD300 million has been mooted. Quoting ‘market sources’, ZF says entrepreneur Zoltan Teszari, who holds a 43% stake in RCS&RDS, is currently in the process of selecting a bank to finance any possible deal, with talks having already taken place with Goldman Sachs, Credit Suisse and Morgan Stanley.

It is believed that LGI hired investment bank Rothschilds in 2010 to oversee the sale of UPC Romania, concerned at its dwindling subscriber base. The Romanian unit was initially valued at USD700 million, although the anticipated price-tag is now believed to be far lower. For his part, Romanian communications minister Valerian Vreme has indicated that, whilst any potential acquisition will need to be analysed by the country’s Competition Council, he does not believe that the deal will lead to a monopoly market situation.

According to TeleGeography’s GlobalComms Database, at end-December 2010 RCS&RDS was Romania’s second largest broadband provider by subscribers, with a 24.2% market share, narrowly behind fixed line incumbent RomTelecom (30.3%). UPC Romania is the third-placed operator by subscribers with a 7.7% market share.

If the acquisition goes through as planned, RCS&RDS will see its enlarged subscriber base narrowly overtake market leader RomTelecom.

Romania, Liberty Global (incl. LGI), RCS&RDS (DIGI), UPC Romania (now part of Vodafone)