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Prague (pte017/10.02.2005/10:30) - The Czech government has announced that all five companies short-listed to buy the state-controlled telephone company Cesky Telecom http://www.telecom.cz can go ahead and make formal bids. "The government has approved all five entities to proceed into the final bidding round," said Bohuslav Sobotka, the Czech Republic's finance minister. As the Wall Street Journal (WSJ) http://www.wsj.com reports, earlier in the week the Czech government commission on the sale of Cesky Telecom short-listed three telecommunications operators and two financial consortiums after receiving their initial bids for the state's 51.1 per cent in Cesky Telecom, valued by analysts at around 2 billion euros.
Bidding for the Czech telecom operator are Spain's Telefonica, Switzerland's Swisscom and Belgium's Belgacom. Private equity companies Blackstone Group, CVC Capital Partners and Providence have teamed up to make a joint bid for the company. Another consortium of Czech financial company PPF, its Czech-Slovak peer J&T Finance Group and smaller Czech Internet services provider InWay is also set to make an offer. According to Sobotka, the three telecoms operators can start carrying out a due diligence of Cesky Telecom before submitting their final bids by March 29. The two financial investors will have to link up with major telecoms operators before making their final offers, he said. "A major telecommunications operator has to play a significant role in a consortium, including financial investors," said Sobotka. According to Sobotka, the government's advisors will be the final authority to judge whether the two financial consortiums have teamed up with acceptable industry companies.
Sobotka declined to say how much money the government expects to raise from the sale of Cesky Telecom. However, according to local media reports, preliminary bids range from 2.03 billion euros to 2.38 billion euros, with the lowest-bid coming from Swisscom and the highest put forward by the PPF-led consortium. As the WSJ reports, the government has reserved the option of offering its Cesky Telecom shares on capital market if it does not receive attractive bids from individual telecoms companies or consortiums of financial and industry investors. According to Sobotka, the offered price will be the only criteria in the final bidding round and the government will evaluate the binding bids on March 31 or shortly thereafter.
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