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Wednesday, August 16, 2000
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German company considered leader in Radiokomunikace bid By Lisa Gonderinger At least six companies are reported to want a stake in Ceske radiokomunikace, the country's second-largest telecom. The government put its 51 percent stake on the auction block in mid-July, and hopes to choose a buyer by the end of September. Experts estimate the sale could fetch as much as 20 billion Kc to 30 billion Kc ($513 million to $769 million), making it one of the larger privatizations in the country. The players include TeleDanmark and Deutsche Telekom, which both already own stakes in parts of Radiokomunikace. French conglomerate Vivendi and Telecom Italia also have expressed an interest -- as well as two investment funds, Emerging Markets Partnership and Hicks Muse Pate & Furst, according to media reports. Radiokomunikace provides TV and radio broadcasting and holds a large stake in Czech mobile-phone operator RadioMobil. It posted a 1999 net profit of 607 million Kc. The privatization is behind schedule, as it was initially intended to be completed by the middle of this year. It was put on hold as government officials sifted through the implications of Deutsche Telekom's March request to increase its holdings in RadioMobil from 49 percent to 60 percent, a move that will cost the company as much as 22 billion Kc. RadioMobil is the largest, most profitable and most valuable holding of Radiokomunikace, said Jan Slaby, an industry analyst with Wood & Co. "There was some question whether there would be enough interest in buying Radiokomunikace if it only came with a minority piece of RadioMobil," he said, adding that when combined with the third main holding -- Internet provider Contactel -- all the important telecommunications bases are covered. "The value of this privatization is really in the synergy of these three companies." Radiokomunikace is successful, profitable and poised to tap into a market that is only expected to continue booming, Slaby said. "What these companies are looking to buy is potential," he said. "This is considered the most developed, potentially profitable mobile market in Central and Eastern Europe." Deutsche Telekom has made no secret of its desire to expand in the region, and in general -- earmarking hundreds of millions of dollars for acquisitions in the near future. It's a favorite because of this. But it's not the only company with a foot in the Radiokomunikace door. TeleDanmark holds a 20.8 percent stake in the company, as well as a 50 percent stake in Contactel. It bought both after being shut out twice in attempts to break into the Czech market. In 1995, it tried to become a strategic partner to national phone company SPT Telecom and then tried for a mobile-phone license in 1996. Lisa Gonderinger's e-mail address is lgonderinger@praguepost.cz More Business stories
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