Slovakia has scrapped an initial public offering for its 49 per cent stake in Slovak Telekom after it received a higher offer from what reports say is majority shareholder Deutsche Telekom.
"This morning [on Thursday] the government received a better offer from strategic investors, a binding offer," Finance Minister Peter Kazimir told Reuters, without revealing the identity of the bidder. "As we are trying to be good managers and more is more, we decided to reject the offer generated by the IPO."
According to Reuters and Bloomberg reports, Deutsche Telekom is widely believed to be the investor in question. The German operator already owns 51 per cent of Slovak Telekom and is seen as the natural candidate to take full control.
Sources told Bloomberg that Deutsche Telekom offered more than the €750 million ($851 million) the government would have collected based on the pricing before the IPO was set to proceed.
The government launched the IPO on Apr. 21 and was looking to raise up to €1 billion. The offer had been due to close on May 6.
"We think that the stake has higher value," Kazimir told Bloomberg. "The reason why we stopped the process is that we are able to sell it for more. The offer is notably better."
A move to buy the rest of Slovak Telekom would certainly align with Deutsche Telekom's strategy to create a more integrated group in Europe, where it is present in 12 markets. The company only this week unveiled a campaign to support its "strategy for becoming the leading telco in Europe".
"By 2018, we want to become the leading European telecommunications provider. That's why we're investing in modern network technologies and a cross-border infrastructure in Europe. Together with our [national operators], we strive to offer our customers the best network quality, products and services and capture business synergies efficiently," said Claudia Nemat, board member for Europe and Technology.
The company plans to invest more than €6 billion in the expansion of its European networks by 2018, complete the migration of customer lines to all-IP and offer more cloud-based products across borders, added Nemat.
Companies within the Deutsche Telekom group are increasingly displaying a greater level of integration at the service level, with some offerings now common across several markets. In Slovakia, for example, the group recently launched the Magenta One converged fixed and mobile offering that was first launched as MagentaEINS in Germany last year.
Some partnerships with over-the-top (OTT) companies are also group-wide, such as the agreement between Deutsche Telekom and Evernote that has seen several of the group's national operators offer free Evernote Premium services for a year.
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