Deutsche Telecom may pay just enough for Slovakia's fixed-line telecom monopoly to meet government expectations of 40 billion crowns ($896 million) in revenues, telecoms analysts said on Friday.
Deutsche telecom (DT) remains the only bidder in a tender for a 51 percent share in Slovenske Teleckomunikacie (ST) after Dutch KPN Telecom said on Thursday it had not submitted a bid in the final round.
In May, Telekom Austria-the last of the original three bidders-also dropped out of the race.
But a Slovak telecom ministry official said on Thursday the tender was likely to stand even with a single bidder, unless DT's offer was too low.
Analysts said Deutsche's offer might still meet the government's expectations as it did not find out about KPN's withdrawal until after its final bid had been submitted.
"Deutsche may have been prepared to pay a certain premium to outbid its rivals", said Jozef Gasparik, a London-based analyst at Williams de Broe, a brokerage.
"However, the price will most likely be comparably lower than in other Central European countries," he added, citing factors such as rapid telecoms regulation liberalisation, which makes incumbent telecoms less attractive, a shaky political situation, and unclear legislative framework in Slovakia.
The head of Slovak Telecom resigned in May to protest state plans for ST to participate in a capital increase at Postova Banka, of which it is a shareholder, calling the move an "unsound investment".
Another analyst at a foreign brokerage, who asked not to be identified, said he also believed the deal may fetch some 40 billion crowns.
"However, that figure may already include some investments (that DT would pledge to make in ST)," he said.
Neither DT nor the Slovak government have commented on the value of the bid, but Finance Brigita Schmognerova said earlier in June that she expected to get some 40 billion crowns. Reuters
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