A Berenberg Bank analyst turned up the pressure on Tele2 CEO Mats Granryd to sell the company's Norwegian business, saying the operator could net up to 3 billion Swedish kronor (€334 million/$458 million) more than the unit is believed to be worth by analysts.
Berenberg's Barry Zeitoune thinks that Tele2 could net 6 billion kronor by selling the business to TeliaSonera. The price is higher than analysts' average 3 billion to 4 billion kronor valuation of Tele2 Norway, and is the company's best option in the country after it failed to win any 4G spectrum in an auction in December, Zeitoune told Bloomberg.
Zeitoune revealed his view a day after TeliaSonera CEO Johan Dennelind said he would consider buying Tele2's Norwegian business, to keep pace with similar consolidation in European markets, Bloomberg reported.
Granryd said in March that the company is exploring its options for Tele2 Norway, and has hired investment bank ABG Sundal Collier Holding as advisers. Other possible paths include seeking a strategic partnership, and attempting to maintain organic business growth on its existing 2G and 3G networks.
Rivals TeliaSonera, Telenor and new entrant Telco Data each won blocks of 4G and additional 3G spectrum in Norway's December auction, which netted €212 million ($290 million) for the Norwegian government.
The decision leaves Tele2 little room to grow its existing networks at a time when it is losing money in Norway. EBITDA fell 41 per cent year on year to 121 million kronor in 2013, and subscriber numbers declined 3 per cent to 1.1 million.
Mia Brunell Livfors, outgoing CEO of Tele2 investor Kinnevik, called for a resolution of the Norway situation in mid-February. In a Reuters report, Livfors hinted at a sale of the Norway business by homing in on Tele2's strength in Sweden and Baltic markets.
Livfors also told Reuters that Tele2 still has growth opportunities in the Netherlands--an opinion that Zeitoune countered in a previous Bloomberg interview, when he said the operator should sell its Dutch business. The Netherlands business suffered a fall in EBITDA in 2013, despite growing its subscriber base and sales during the year.
A wave of consolidation is predicted in European markets with four mobile operators if European Commission regulators approve key acquisitions planned by Telefónica and Hutchison Whampoa.
Telefónica Deutschland is attempting to acquire rival E-Plus from KPN, while in a separate deal, Hutchison's 3 Ireland unit is seeking clearance for a takeover of Telefonica's local O2 unit.
German regulators said they would require Telefónica Deutschland and E-Plus to relinquish some of their spectrum assets if the acquisition gains European clearance.
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