Government plans to offload Cesky stake

16 Nov 2004

The Czech government is planning to sell its remaining 51% stake in national PTO Cesky Telecom through the market rather than to a strategic investor, and in the process hopes to raise up to CKK15 billion (USD618 million). The state has opted for a flotation in the wake of three failed attempts to sell the state-controlled behemoth through a tender. Last month the government recommended a secondary placement of Cesky shares against the advice of its sale advisors CSFB. The cabinet is expected to endorse the sale today.

The government’s previous efforts to sell off Cesky Telecom fell victim to a general cooling in sentiment towards telecoms stocks and a subsequent collapse in market valuations for shares. TDC of Denmark is once again being touted as a possible bidder in conjunction with Goldman Sachs. The Danish PTO came close to buying Cesky two years ago for USD2.3 billion, as part of a consortium with Deutsche Bank. Other interested parties include Vodafone and Orange, which would probably only be interested in acquiring Cesky’s mobile arm Eurotel Prague. A number of other bids are also expected from the financial community, although, according to Financial Times, the Czech government fears such groups could use highly leveraged bids to buy Cesky and then dismantle it and sell off its assets.

Czech Republic,O2 Czech Republic (incl. CETIN), Vodafone Group,

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