Identifier
Created
Classification
Origin
05PRAGUE197
2005-02-10 16:22:00
UNCLASSIFIED
Embassy Prague
Cable title:  

MAJOR EUROPEAN TELECOMS COMPANIES MAKE PRELIMINARY

Tags:  ECPS EINV ETRD EZ 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS PRAGUE 000197 

SIPDIS

STATE FOR EUR/NCE AND EB/CIP
COMMERCE FOR 4232/ITA/MAC/MROGERS

E.O. 12958: N/A
TAGS: ECPS EINV ETRD EZ
SUBJECT: MAJOR EUROPEAN TELECOMS COMPANIES MAKE PRELIMINARY
OFFERS FOR CESKY TELECOM

REF: A. 04 PRAGUE 1790


B. SOFIA 208

UNCLAS PRAGUE 000197

SIPDIS

STATE FOR EUR/NCE AND EB/CIP
COMMERCE FOR 4232/ITA/MAC/MROGERS

E.O. 12958: N/A
TAGS: ECPS EINV ETRD EZ
SUBJECT: MAJOR EUROPEAN TELECOMS COMPANIES MAKE PRELIMINARY
OFFERS FOR CESKY TELECOM

REF: A. 04 PRAGUE 1790


B. SOFIA 208


1. Five entities made preliminary offers for the Czech
Republic's leading telecoms company, Cesky Telecom (CT),by
the January 31 deadline for doing so. They are the Spanish
firm Telefonica, Belgium's Belgacom, Swisscom, and two
financial groups, a consortium of the U.S. company Blackstone
Group, CVC Capital Partners and Providence Equity and another
consortium of the Czech holding company PPF, the Slovak
financial firm J&T and data telecommunications company InWay.
The government will require the latter two bidders to find
partners with experience in managing telecoms in order to
have access to CT documentation. Apparently InWay (a
subsidiary of PPF) does not fill the bill. The financial
bidders may turn to companies like France Telecom or Vodafone
that had shown interest but did not actually put in a
preliminary bid. They may even try to find a partner among
the companies that did bid.


2. Offers are preliminary and may change after full due
diligence is finished. Binding offers are due March 31. The
preliminary offers, as reported, should be reassuring to the
the Czech government that it made the right decision in
seeking a "strategic" sale before turning to a public
offering on the stock exchange as just occurred in Bulgaria
(reftels). The government approved continued negotiations
with the five bidders on February 9. The most interesting
offers are the outliers. PPF was highest at Kc 71.3 billion
($3.1 billion),while Swisscom came in lowest at only Kc 60.9
billion ($2.6 billion). The offers may say something about
how much PPF wants to win, and about how confident Swisscom
feels it is. All but Swisscom are offering more than the
current Kc 400 ($17.40) per share price of CT shares on the
local stock market. At that price, the state's shares are
worth Kc 66 billion ($2.86 billion).
CABANISS