Debt-laden Telefonica, in a stock market announcement, confirmed that it is “exploring strategic options” in relation to its stake in Telefonica Czech Republic.
This includes conversations with investor group PPF, adds the statement, although Telefonica notes nothing is certain regarding whether or not an agreement will be reached.
The announcement follows a Bloomberg report on Monday (14 October) that Telefonica had appointed Goldman Sachs and Societe Generale to help find a buyer for its Czech holdings.
The Spanish giant has a 69 per cent stake in Telefonica Czech Republic, giving it a value of $3.6 billion on yesterday’s Prague trading.
“It makes sense for Telefonica to sell the asset and focus on the main European countries,” said Borja Mijangos, an analyst at Interdin Bolsa in Madrid, quoted by Bloomberg. “Telefonica could use the proceeds from the sale to further deleverage and get ready for the next purchase, which could well be in Brazil.”
The company has already announced a deal to exit the Irish market.
Speculation correctly flagged up Petr Kellner, owner of PPF, as the most likely buyer.
PPF had said earlier it wouldn’t be bidding in the country’s upcoming 4G auction, saying it opposed certain conditions imposed by the regulator.
Entry to the Czech mobile market via Telefonica may well then be a more attractive route for Kellner.
Another Bloomberg source said if PPF is not interested, then a private equity fund might be. He added that Russian telecoms groups would also be interested, but they would most likely face political opposition.
As of end-June 2013, according to figures from GSMA Intelligence, T-Mobile had 5.5 million subscribers in the Czech Republic, followed by Telefonica’s Czech business (just over 5 million). Vodafone occupies third position with 3.3 million subscribers.
Telefonica’s current net debt stands at around €48.6 billion. It aims to push that under €47 billion by the end of the year.