Bloomberg News

Solorz-Zak Said to Lead Polkomtel Sale With $6.6 Billion Bid

June 15, 2011

(Updates with analyst comment in fourth paragraph.)

June 15 (Bloomberg) -- Polish billionaire Zygmunt Solorz- Zak is leading the auction for Polkomtel SA after getting financing for a bid that values Poland’s largest-mobile phone company at about 18 billion zloty ($6.6 billion), according to people with knowledge of the matter.

The other candidates, Apax Partners LLP, which has sought financing for its bid, and Telenor ASA, the Norwegian mobile operator allied with Bain Capital LLC, are considered less likely to win the auction, said three people, who declined to be identified because the process is confidential. Solorz-Zak is the second-wealthiest Pole, according to Forbes magazine.

Polkomtel’s mobile-phone services may help the Polish billionaire, who owns the country’s second-biggest television group Cyfrowy Polsat SA, tap rising demand for bundled phone, Internet data and TV services. Polkomtel, which uses the Plus brand for its services and has almost 14 million basic voice and fast-Internet customers, has lost market share this year, according to Espirito Santo Bank analyst Will Draper.

“Poland is a growth market, it’s underpenetrated for data,” Draper said. “It’s a reasonable market structure with three major mobile-phone players.”

Three Bids

The owners of Polkomtel received three bids, Herbert Wirth, chief executive officer of shareholder KGHM Polska Miedz SA, told reporters in Lubin, Poland today. He didn’t name the bidders.

A winner may be decided this week or next, the people said. The 2008 sale by Denmark’s TDC A/S of a 20 percent holding in Polkomtel provides a 3.7 billion-euro ($5.3 billion) minimum valuation, KGMH said in November.

The owners of Polkomtel, which include British mobile-phone company Vodafone Group Plc, power utility PGE SA and oil refiner PKN Orlen SA, plan to complete the sale by the end of June, Weglokoks SA Chief Executive Officer Jerzy Podsiadlo said on May 16. Weglokoks, a Polish coal trader, owns 5 percent of Polkomtel.

Spokesmen for Solorz-Zak, Telenor, Apax, Bain and Vodafone declined to comment. Sweden’s biggest phone company TeliaSonera AB said last week it decided against making an offer.

Enterprise Value

Solorz-Zak’s 18 billion-zloty bid represents Polkomtel’s enterprise value and would include debt that may get refinanced, said the people. The mobile-phone company’s enterprise value includes about 2 billion zloty of net debt, a 1.03 billion-zloty dividend due to current shareholders and a 130.7 million-zloty fine imposed by Polish antitrust regulators, a person close to the talks said on May 25.

Not all of the shareholders are unified about the process as they weigh local and political issues and assess the quality of Solorz-Zak’s funding, two of the people said, adding that the deal could still fall apart.

Vodafone, which holds rights to bid for the Polish operator, must still decide whether to sell its 24 percent holding, said Espirito Santo’s Draper.

“It’s not a given that Vodafone will sell,” he said. “If the bids that finally materialize do not meet their criteria then they won’t accept the offers and they will exercise their pre-emption.”

--With assistance by Brett Foley and Anne-Sylvaine Chassany in London, Diana ben-Aaron in Helsinki and Nathaniel Espino in Warsaw. Editors: Simon Thiel, Jeffrey. St. Onge.

To contact the reporter on this story: Jacqueline Simmons in Paris at Jonathan Browning in London

To contact the editor responsible for this story: Kenneth Wong in Berlin at

Tim Cook's Reboot
blog comments powered by Disqus