Eurobites: I Heard a Rumor…

Over here in Europe, we like nothing better than a triple espresso, a crumbly croissant, a four-hour nap, and a good bit of industry gossip to start the day. And there's plenty of all of those wonderful things around at the moment.

Don't believe me? Then get stuck into these petit fours

Checking out the Czechs!
There are plenty of potential bidders waiting to swoop for a slice of the 51.1 percent of Cesky Telecom a.s. that the Czech government is due to offload in the coming months.

A government document reveals that six telecom companies and 12 financial firms have expressed an interest in the stake, which should raise about $2.2 billion. Cesky's solid financial position and dominance of a growing market at the heart of the expanding European Union makes it an attractive target (see S&P Affirms Cesky Telecom's A- ).

TDC Tele Danmark A/S put its name forward early on, but the Danish incumbent is not alone. The other front runner is Swisscom AG (NYSE: SCM), which is casting for expansion opportunities after its proposed merger with Telekom Austria AG (NYSE: TKA; Vienna: TKA) went belly up in August (see No Merger for Euro Carriers).

But is that the same Swisscom that sold its stake in Cesky Telecom earlier this year? You better believe it, though that holding was as one half of a joint [ed. note: a roach?] venture with Dutch incumbent KPN Telecom NV (NYSE: KPN), which wanted to sell such non-core assets to pay down its debts (see KPN Gets Trendy).

Other names believed to have checked out the Czechs include Telekom Austria and Deutsche Telekom AG (NYSE: DT), while Orange SA (London/Paris: OGE) and Vodafone Group plc (NYSE: VOD) are believed to have eyed up Cesky's mobile business.

Among the financial firms thought to be interested are Deutsche Bank AG and CVC Capital Partners.

The government is set to decide next Wednesday on whether it will sell the stake directly or place the shares on the stock exchange, or a mixture of both. At that point we'll be able to make the "bad Czech" jokes.

Five Go Mad in Spain?
CVC Capital isn't restricting its activities to Central Europe: It's believed to be part of a five-strong consortium of buyout firms planning a monster €11 billion (US$14.5 billion) bid for Grupo Auna, a competitor to Spanish incumbent Telefònica SA.

According to local media reports, CVC has teamed up with Apax Partners, The Blackstone Group, Carlyle Venture Partners, and Providence Equity Partners to work on a bid.

Auna, which provides fixed, mobile, and TV services, recorded revenues of nearly €3.9 billion ($5.1 billion) and a loss of €55 million ($72.3 million) in 2003. About three quarters of its revenues come from its mobile operator Amena, Spain's third-placed player behind Telefònica Mòviles SA and Vodafone Group plc (NYSE: VOD).

An alternative for Auna would be to float on the Madrid stock exchange, something it is believed to be considering.

Slovenia's Slice of the Action
Another acquisition rumor involves Deutsche Telekom's alleged interest in buying a slice of East European carrier Telekom Slovenije, the national operator in Slovenia, which lies just to the south of Austria and east of Italy.

The carrier, 62.5 percent owned by the Slovenian government, dominates the telecom market, and recorded revenues of 138 billion Slovenian Tolars ($764 million) and a net profit of 10.3 billion Tolars ($57 million) in 2003. (By the way, nearly everybody in Slovenia looks like a million Tolars).

The German giant isn't commenting on the rumor, which first appeared in Slovenian daily paper Delo, but such a move would add to its existing East European holdings, which include control of Hungary's national carrier Matáv Group, and give it a stake in a country that is set to expand its economy in the coming years (see LRI: Eastern Europe Boom on Hold).

All's Fine at Telecom Italia
Telecom Italia SpA (NYSE: TI) has been fined €152 million ($200 million) by Italy's antitrust authorities for abusing its dominant position in the corporate fixed-line services market.

A national incumbent operator abusing its market dominance? Whatever next?

The Italian stallion was found guilty of including exclusivity clauses in its contracts and offering prices that competitors couldn't hope to match. While that constitutes a public slap on the wrist, it's perhaps not a sum that will inflict much harm on the carrier (see Telecom Italia Posts Q3). Nevertheless, the carrier is appealing against the fine.

Meanwhile, Telecom Italia has been deflecting rumors that it might merge its fixed and mobile businesses, which are currently listed separately. The carrier still owns a majority stake in Telecom Italia Mobile SpA (Milan: TIM). Such a move would allow the operator to use the growing revenues from its mobile operator to help fund the overall group's operations.

Deutsche Telekom is already involved in a similar move by bringing ISP T-Online International AG back into the fold (see EuroBites: Money, Money, Money!!).

Other European news of note from the past week includes:

— Ray Le Maistre, International News Editor, Light Reading

Vent 12/5/2012 | 1:02:47 AM
re: Eurobites: I Heard a Rumor… With regard to telecom Italia's competition
The press in Italy have reported that there will be a merger between Wind (second biggest operator fixed line and mobile) and Fastweb ( Cable and local fibre loop)early next year and then subsequesntly with Albacom (3rd biggest operator? participation with BT))to create a real competitor to Telecom Italia
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