LJUBLJANA (Slovenia), November 1 (SeeNews) – One of the units of Deutsche Telekom will definitely bid in the upcoming sale of incumbent telco Telekom Slovenije [LJE:TLSG] with a couple of private equity funds also expected to join the fray, a Ljubljana-based analyst said on Friday.
In June, the Slovenian parliament approved plans for the privatization of Telekom Slovenije.
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Earlier this week, Slovenian state fund SOD said it has mandated Citigroup Global Markets Limited to provide advisory services on the sale of a 73.08% stake in Telekom Slovenije co-owned by SOD, the Slovenian government, pension fund management company Kapitalska Druzba, insurer Zavarovalnica Triglav and reinsurer Sava Re Group.
“Over the past year there were also speculations that operators from Russia or Turkey could be interested in Telekom Slovenije as a gateway to the Balkan market. They could be more generous in terms of pricing,” Saso Stanovnik, head of research at investment company ALTA Invest, told SeeNews in an email.
Telekom Slovenije Group also has operations in Kosovo, Macedonia and in Bosnia and Herzegovina.
Croatia's biggest telecoms operator, Hrvatski Telekom [ZSE:HT-R-A], 51%-owned by Deutsche Telekom, could submit a bid for its Slovenian peer or that could be done by another unit of the German group, Magyar Telekom, the analyst said.
In his view, the business case for a Hrvatski Telekom bid is underpinned by the geographic proximity of the two companies’ businesses and the fact that Slovenians travel a lot to Croatia and in that sense their operations would be well-aligned.
However, he cautions that it would be hard to estimate just how much negative spin could be put on a potential Hrvatski Telekom bid for Telekom Slovenije, especially at a time when several Croatian companies are pursuing acquisition targets in Slovenia.
In terms of the current appeal of Telekom Slovenije’s business as an acquisition target, Stanovnik said there is a room for cost optimisation at the company. “The EBITDA margin trails its peer group while there is room for improvement in its labour cost to revenue ratio.”
Further draws for potential bidders include Telekom Slovenije’s dominant footing on its home market and its position as a regional player, he added.