Report: Investors raid Telekom Austria; shares rise on takeover talk - Mobile World Live

Report: Investors raid Telekom Austria; shares rise on takeover talk

29 NOV 2011

An investment group reportedly led by Austrian ‘corporate raider’ Ronny Pecik and Orascom Telecom’s Naguib Sawiris has ramped up its investment in Telekom Austria, prompting speculation about the future of the country’s incumbent fixed-line and mobile operator.

The Financial Times reports that Pecik’s group has built a shareholding of almost 16 percent through direct share purchases and options over the past few months. He had previously declared only a 5 percent shareholding.

However, while the move has inevitably triggered speculation about a takeover, a hostile bid is seen as unlikely because of the Austrian government’s 28.4 percent 'blocking' stake in the firm.

"The Austrian state holding company is a stable core shareholder in Telekom Austria and has taken note of the change in the shareholder structure,” Bernhard Nagiller, spokesman for the state holding company, told the newspaper. Neither Pecik nor Telekom Austria were prepared to comment.

The report notes that Telekom Austria has recently hired an investment bank to advise on the situation. “A hostile bid would be brave given the government stake,” CFO Hans Tschuden said recently. “[It is] rather unlikely to be the case. If he [Pecik] wants seats [on the board] then he can get [them], but only in a friendly environment.”

Some analysts believe the move could also be influenced by Sawiris’ links with operators Orascom and VimpelCom (Orascom’s indirect majority parent). “[Sawiris] might envisage a scenario in which a politically and financially weakened Telekom Austria might be more amenable to some form of co-operation or might possibly consider hiving off some foreign operations,” the report says.

As well as being the country’s fixed-line incumbent operator, Telekom Austria also controls Austria’s largest mobile operator – Mobilkom Austria (A1) – and a number of mobile operators in Eastern Europe, notably in Bulgaria (Mobiltel) and Belarus (Velcom).

In the first nine months of this year, net profit at Telekom Austria dropped by more than 73 percent to EUR68.7 million from EUR256.5 million, while sales fell 4.1 per cent year on year to EUR3.34 billion. However, its shares rose 3 percent yesterday to EUR8.47 on the takeover talk.