Telekom Austria to safeguard itself against ‘hostile takeover’ from Sawiris?

4 Oct 2011

Telekom Austria Group has reportedly enlisted investment bank Merrill Lynch to oversee its defence strategy as it attempts to fend off what has been described as a ‘hostile takeover’ from an international investor group that includes Egyptian billionaire Naguib Sawiris, chairman of Orascom Telecom, and Vienna-based businessman Ronny Pecik. The development, as reported by financial daily Wirtschaftsblatt, follows last month’s news that the Vienna-based telecoms group was being touted as a potential acquisition target by the consortium. On that occasion Format Magazine reported that the alliance between Sawiris and Pecik was keen to secure a 20% stake in Telekom Austria for a purchase price of around EUR750 million (USD1.02 billion). Sources close to the deal indicated that the investors were eyeing the 15% shareholding held by US investor Capital Research & Management, but TeleGeography noted that the US firm scaled its shareholding down to 7.94% in June 2011, and reduced it again to 4.99% in August, casting doubts over the credibility of the information. For its part, Telekom Austria denied any knowledge of the rumoured deal.

The credibility of the reports remains doubtful however, as Wirtschaftsblatt has insinuated that Telekom Austria could approach a ‘white knight’ investor in the shape of Vimpelcom, Telefonica, Telenor or Turkcell to fend off the consortium’s advances; on 15 April 2011 Vimpelcom completed a USD6.5 billion merger with Wind Telecom (formerly Weather Investments), granting it ownership – through Wind Telecom – 51.7% of Orascom Telecom and 100% of Wind Telecomunicazioni (Wind Italy). Further, following the closure of the deal Orascom chairman Sawiris assumed a seat on the new board of the enlarged Vimpelcom – making the Russian telecoms giant an unlikely saviour.

Austria, A1 Telekom Austria Group, Global Telecom Holding (GTH, formerly OTH)