LJUBLJANA (Slovenia), June 16 (SeeNews) – UK private equity fund Cinven said on Tuesday conditions are no longer in place to proceed with the acquisition of Telekom Slovenije [LJE:TLSG] after a solution to deal with the uncertainty around the merger of the telco's Macedonian operations could not be agreed with Slovenian state holding company SDH.
On Monday, SDH, which coordinates the privatization process in the country, said it does not accept the additional conditions imposed by Cinven for the acquisition of a 72.75% stake in Telekom Slovenije.
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"On that basis, the conditions to proceed with the transaction now are not in place. Cinven remains interested in the privatisation of Telekom Slovenije and open to re-evaluate the situation in the coming weeks, once the outcome of Macedonia is clarified," Cinven said in a statement.
SDH has said the additional conditions set by Cinven represented too great a risk and could lead to an unjustified reduction in the purchase price but that it was still ready to complete the transaction under the conditions approved by its supervisory board on June 10.
In April, SDH said a single binding bid had been handed in for the sale of the stake in the incumbent telco. Cinven later confirmed it had placed the offer.
Last Wednesday, SDH said its supervisory board had approved the sale of the telco stake to Cinven, subject to certain conditions.
SDH said at the time it received on June 9 amendments to the revised binding offer by Cinven, which were not considered by the supervisory board because the conditions from those amendments were not acceptable for the managing board.
Earlier on Wednesday, Cinven issued a statement saying that since submitting its best and final offer for the acquisition of Telekom Slovenije on May 22, it was informed on June 1 by SDH of further unexpected delays in the antitrust approval processes and completions of the Debitel acquisition and Macedonian operations merger by Telekom Slovenije.
On Thursday, Cinven said it considers the amendment an integral part of the offer, without which Cinven would not be able to proceed towards completing this transaction.
"Based on the information received from SDH, where the amendment is not mentioned, Cinven understands that the offer has not been accepted. We believe that the proposed amendment is beneficial to all parties as it reduces the risk of a failed transaction and, on the assumption that the Debitel and Macedonia transactions receive the necessary approvals and proceed to completion as envisaged, does not alter the economic terms of the deal,” the equity fund said.
In October, Telekom Slovenije - which operates as a fixed and mobile services provider in Slovenia, Bosnia, Kosovo and Macedonia, and Telekom Austria Group said they had agreed to merge their Macedonian units. The agreement also includes call and put options for the exit of Telekom Slovenije from the joint venture within three years from closing of the merger.
In January, Macedonia's competition protection commission said it was inviting public comments on the planned business concentration to be filed within ten days after the publishing of the relevant notice after which it will take a final decision on the merger.
In February, Telekom Slovenije said it had signed a deal to acquire 100% of Slovenian mobile carrier Debitel Telekomunikacije and that the transaction will be concluded after obtaining approval from competition protection authorities.
In 2013, Telekom Slovenije was placed on a list of 15 state firms earmarked for privatization.
Cinven, set up in 1977, has offices in Guernsey, London, Frankfurt, Paris, Milan, Luxembourg and Hong Kong.