Government to sell Telekom by tender in 2013 - EUR 2.5 billion for 100 percent of shares

Government of Serbia is ready to try again to sell Telekom by tender, but only on the condition that it gets EUR 2.5 billion for 100% of shares in this company, the new issue of NIN weekly magazine writes.

The government agrees that it is a good reason to stop Telekom from going public because a possible low price of shares, which could be get at this moment, would also lower the price of the state's stake shortly before its sale. That means that the trading in the shares distributed among the citizens and employees before the elections in May will not take place in September as it was initially announced.

Aleksandar Vucic, Ivica Dacic and Mladjan Dinkic have reached an agreement to sell Telekom by international tender, with a minimally set price and after a previous communication with all the interested.

- We will first see if there are those willing to pay the price we request and, if there are any, we will invite tenders. Otherwise, we will postpone that decision. However, I am sure that we can get EUR 2.5 billion because the takeover of Telekom also means the purchase of its market share in the Republic of Srpska and Montenegro. I think that we can start preparations for the sale by tender as early as this autumn and sell Telekom during the next year - says a source from the government, who stresses that the state has already been offered EUR 2 billion for its stake in Telekom in informal talks, but he refuses to tell if that offer came from Telekom Austria.

However, the requested price of minimum EUR 2.5 billion seems to be "too high" for this time of crisis, when things are sold only out of necessity and mainly below cost.

Currently, the value of Telekom is appraised at between 1.9 billion and 3 billion euros. The state already tried to sell Telekom by tender in October 2010, but that attempt ended in a failure in May 2011. The estimated value of the company at that time amounted to EUR 2.4 billion, and the state asked EUR 1.4 billion for its 51-percent stake.

The only bid was then submitted by Telekom Austria, which first offered EUR 950 million for the stake and another EUR 450 million for investments, while its second offer was to pay EUR 800 million immediately and another EUR 300 million over the next nine years. The government then rejected its offer.

And now this Austrian company is again interested in Telekom, especially after it grew stronger thanks to its partnership with billionaire Carlos Slim from Mexico.

The ruling coalition intends to sell 100 percent of shares in Telekom, that is, the state's complete stake of about 78 percent plus the shares held by citizens and Telekom employees (22%), who would be guaranteed the same share price as the one paid to the state.