Czech Government Gets 10 Potential Bidders For Cesky Telecom

PRAGUE -(Dow Jones)- The Czech Republic's National Property Fund, or FNM, said Monday that ten potential bidders have expressed an interest for the state's 51.1% stake in telephone company Cesky Telecom AS (BAATELEC.PR).

All ten bidders applied to collect an information pack by Friday's deadline, FNM's spokeswoman Petra Krainova said in a statement.

The bidders include both strategic and financial investors.

There are six telecommunications companies: Switzerland's Swisscom AG (SCM), Denmark's TDC A/S (TLD), Belgian Belgacom SA (BELG.BT), the U.K.'s Vodafone Group PLC (VOD), Spain's Telefonica SA (TEF) and France Telecom (13330.FR)

The remaining four bidders are financial investors: a consortium of Blackstone Group (BGP), CVC Capital Partners Ltd. (CVC.YY) and Providence; Citigroup Inc.'s (C) Citigroup Venture Capital; Czech financial group PPF AS and SPO Partners investment company.

The FNM said that all of the 10 potential bidders have signed confidentiality agreements with the government's sale advisers, allowing them to collect the information memorandum on Cesky Telecom after paying a EUR30,000 fee.

The bidders will have until Feb. 3 to submit their preliminary bids for Cesky Telecom, Pavel Kuta, the FNM's vice-chairman told Dow Jones Newswires earlier Monday.

In December, the government decided to open a public tender for its Cesky Telecom holdings. It set March 31 as its deadline for finding either a strategic buyer or a consortium, including financial and strategic investors, for the company.

If no suitable investor is found, the government said it would sell its Cesky Telecom shares in a market placement.

Analysts have valued the government's stake in Cesky Telecom at around EUR2 billion.

The current tender is the government's second attempt to sell Cesky Telecom since 2002 after calling off talks with a consortium of Deutsche Bank (DB) and TDC in part on disagreements over terms with Swisscom and Dutch telecommunications company KPN, two minority shareholders in Cesky Telecom at the time.

Over the past two years, Cesky Telecom has done a lot of cleaning up to become more attractive for investors.

In 2003, Swisscom and KPN sold out their Cesky Telecom holdings, making the Czech government the single largest shareholder in the company and increasing the free float of the company to about 49%.

Also in 2003, Cesky Telecom bought out minority shareholders in its mobile operator Eurotel Praha SRO (ERP.YY), raising the ownership of the country's largest mobile operator with over four million subscribers, to 100%.

Eurotel is the company's major cash cow, accounting for about two-thirds of its parent's consolidated earnings.

Cesky Telecom Web site: http://www.telecom.cz

-By Leos Rousek, Dow Jones Newswires; 420 221 085 273; leos.rousekdowjones.com

(END) Dow Jones Newswires"

Posted to the site on 24th January 2005