Serbia Grants Telekom Austria Phone Company Bid Extension
April 12, 2011, 12:59 PM EDTBy Gordana Filipovic and Zoe Schneeweiss
(Closes shares in fifth paragraph.)
April 12 (Bloomberg) -- The Serbian government gave Telekom Austria AG three more weeks to work on its offer for a 51 percent stake in Telekom Srbija AD before deciding whether to accept or reject it.
Telekom Austria has offered as much as 950 million euros ($1.38 billion) in cash and 450 million euros in investments over three years, less than the 1.4 billion euros in cash demanded by Serbia. The Finance Ministry said in a statement from Belgrade that it granted an extension to May 3 at the request of the Austrian company, which cited the need to “submit additional information.”
The administration of Prime Minister Mirko Cvetkovic is aiming for the highest price it can get for the main phone company to bolster the economic recovery, trim the budget deficit and steer the Balkan country closer to the European Union.
“This shows that both sides are interested in a deal,” said Bernd Maurer, an analyst at Raiffeisen Centrobank AG in Vienna. “Maybe they will come to a conclusion via negotiations.”
Maurer rates Telekom Austria at “hold.” Telekom Austria shares fell 1.4 percent to 10.18 euros at the 5:30 p.m. close of trading in Vienna, snapping two days of increases.
East Europe Holdings
The Austrian phone company, which runs mobile networks in seven east European nations, placed the sole bid on March 21 for the stake, putting pressure on the government to accept an offer it deems insufficient.
Cvetkovic said earlier today that the Telekom Austria still has not turned over its final bid, which Serbia wants improved if formal talks are to begin.
“The Austrian company has got the additional 15 days to complete its documentation and adjust the financial part of their offer to conditions set in the tender,” the Finance Ministry said.
--Editors: James M. Gomez, Douglas Lytle
To contact the reporters on this story: Gordana Filipovic in Belgrade at gfilipovic@bloomberg.net; Zoe Schneeweiss in Vienna at zschneeweiss@bloomberg.net
To contact the editors responsible for this story: James M. Gomez at jagomez@bloomberg; Angela Cullen at acullen8@bloomberg.net
