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Julian Mattocks
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Prague (pte029/31.03.2005/13:00) - Spanish telecoms giant Telefonica http://www.telefonica.com has virtually won the race for the Czech telecoms operator Cesky Telecom http://www.telecom.cz . As Swiss telecom group Swisscom http://www.swisscom.com reports today in a press release on its website, the Steering Committee for the sale of the 51.1 per cent stake in Cesky Telecom has decided on Telefonica. The Spanish company was the highest bidder, and therefore, the Czech government was recommended to accept the offer.
Altogether, four companies were in the race for the 50 per cent stake in the Czech telecom provider. As well as Telefonica and Swisscom, a consortium led by France Telecom and another bid from Belgian Belgacom were also considered. The winner in the race for Cesky Telecom has to put forward an offer for the take over of the remaining shares within two months. According to the Wall Street Journal http://www.wsj.com , many analysts and bankers have been surprised by Telefonica's interest in Cesky Telecom, as Eastern Europe is far removed from the company's existing geographic focus. Furthermore, the Czech Republic is a relatively mature mobile phone market, offering less growth potential than Latin America and other developing regions.
Telefonica made a bid of 2.7 billion euros for the 51.1 per cent stake, trumping its rivals. Swisscom submitted the second highest bid. "The price offered by Swisscom is the maximum justifiable purchase price from the standpoint of Swisscom shareholders," the Swiss company said in a press release. According to the company, the Swisscom bid for Cesky telecom contained a number of additional assurances that served to protect the special interests of the Czech Republic.
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