Telekom Austria boosted its offer gain control of the Serbian operator, Telekom Srbija, and a deal appears close at hand after the Serbain government promised more favorable conditions for the company.
While Telekom Austria and the Serbian government have both denied any movement from their negotiating stance, reports carried by Reuters make clear that both sides are shifting away their previously hard-nosed approach. Of most interest is a revised offer from Telekom Austria to increase its bid from €950 million to €1.1 billion for a 51 per cent holding in Telekom Srbija. The government had been holding out for €1.4 billion, but is reported to have coaxed Telekom Austria into making a higher offer with the promise of spectrum agreements and extended licences.
However, Telecom Austria is said to have held out on key conditions such as merger clearance in Serbia, and an agreement to restructure Telekom Srbija's costs within a predefined period.
The revised offer would see Telekom Austria make a cash payment of €800 million when the deal is signed, and then annual payments over a nine-year period.
The government, which holds 80 per cent of the share in Telekom Srbija, is planning to sell 31 per cent, while Greece's OTE will sell its 20 per cent holding in the Serbian operator. While the government had taken a tough approach to achieving a high price for Telekom Srbija, the likelihood of a deal was always seen possible given the high level of debt the country is trying to rapidly reduce.
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