Telekom Slovenia sale is cancelled after Cinven pulls out

Slovenia's government cancelled the planned sale of Telekom Slovenije after the sole bidder for the company, UK-based private equity find Cinven, withdrew its offer for a 72.75 per cent stake in the operator.

Slovenian Sovereign Holding (SDH), which is responsible for the coordination of privatisations in the market, said it had received a letter from Cinven saying that the transaction is no longer economically feasible owing to several important developments that have taken place since the bid was approved by SDH in June.

The investment fund said it believes that the regulatory environment will not be investment friendly for Telekom Slovenije. It also noted the recent modification in European Union regulations on roaming and changes in the operation of Telekom "will not have positive impacts on the company's performance results".

SDH said it will now examine what other possible steps can be taken with regard to the assets of Telekom Slovenije. The operator is the largest of 15 companies earmarked for privatisation.

Cinven made a bid for the company in May, reportedly offering €130 ($141) per share, which would value the state-controlled company at €850 million.

Reuters noted that Cinven revised its offer on June 15, adding the condition that it hold back some of the purchase price until Macedonian regulators approve Telekom Slovenije's sale of its Macedonian unit to Telekom Austria. Slovenia rejected the revised offer. Talks were then resumed between SDH and Cinven in July after Macedonia approved the merger of Telekom Austria's subsidiary Vip Operator with Telekom Slovenije's subsidiary One.

In a slightly odd twist, Broadband TV News also reported that Telekom Slovenije is understood to be one of the parties to have submitted a non-binding offer for Serbian operator Telekom Srbija, which is also up for sale.

Telekom Austria Group is also said to be one of several parties to have submitted a non-binding bid for Telekom Srbija by the expiry of the deadline on Aug. 2. Other bidders reportedly include Deutsche Telekom, an unnamed Russian company and a dozen investment funds.

It was also suggested that America Movil could enter the race to buy a stake in Telekom Srbija independently of Telekom Austria, which faces opposition from Austrian shareholders over plans to buy the Serbian operator due to funding issues.

According to Reuters, Serbia said it would decide which company could make a binding offer for the state-owned operator after Aug. 17.

For more:
- see this SDH release
- see this Broadband TV News article
- see this Reuters article
- see this separate Reuters article

Related articles:
Report: America Movil may bid separately for Telekom Srbija
Slovenia says expects to decide on Telekom sale in 2 weeks
Deutsche Telekom buys Slovak Telekom stake for €900M
Telekom Austria brings SE Europe management in line with América Móvil model
Cinven confirms bid for Telekom Slovenia

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