Telekom Austria's bid for Serbian operator called an 'insult'

The Serbian telecoms minister said the conditional offer made by Telekom Austria for a 51 per cent stake in Telekom Srbija was an "insult."

The Austrian operator, which is the only company to make a firm bid, has offered between €800 million and €950 million to acquire a majority holding in Telekom Srbija, with an extra €450 million to be invested in the company over the next three years.

This valuation falls considerably below the minimum bid price placed on the telecoms operator by the Serbian government of €1.4 billion. The administration holds 80 per cent of the shares of Telekom Srbija, with the remaining 20 per cent owned by the Greek operator OTE.

As reported by Reuters, Mirko Cvetkovic, the Serbian prime minister, said that the final decision would be made by a working group tasked with the sale of Telekom Srbija. "They will make it formal after they complete a technical analysis of the offer," the PM said in a statement, adding, "The Serbian government will not sell Telekom Srbija below the minimum price of €1.4 billion."

High-level government officials, including the PM, have repeatedly stated that the operator will not be sold if the minimum price is not reached. "This [Telekom Austria] offer is an insult," said Predrag Markovic, the Serbian telecoms minister.

Seemingly unruffled by this bluster, the CEO of Telekom Austria, Hannes Ametsreiter, acknowledged that his company was the only one making an offer for the Serbian operator, and accepted that its bid did not meet the governments unconditional minimum price. However, he added: "We know exactly what we are prepared to pay and what we are not prepared to pay."

According to Bloomgerg, Ametsreiter said that the company wanted to indicate its interest in Telekom Srbija, and "we've made a fair offer that includes investment in Serbia."

The Austrian company already operates mobile networks in seven Eastern European countries. With analysts indicating that the auction of Telekom Srbija will likely fail, the current suggestion being circulated is that the government should postpone the sale until next year.

For more:
- see this Reuters article
- see this Bloomberg article
- see this Dow Jones Newswires article

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