Slovak Telekom set for flotation as Deutsche Telekom talks end

Slovak Telekom is heading for a public flotation after the government decided to sell its 49 per cent shareholding in Slovakia's largest telecom company.

The company, which provides fixed line, broadband and Pay-TV services, plans to list in Bratislava and London after talks over a potential takeover by Deutsche Telekom, which holds a 51 per cent stake, failed to strike a deal. The privatisation could raise as much as €800m, local media reports have suggested.

"The IPO will mark an important next step in our development and bring greater visibility to the value we intend to create," said Miroslav Majoros, chief executive.

The company provided no details of the price for the initial public offering or when it might take place, but Bratislava has previously suggested it would like to complete any disposal by the end of this year.

Deutsche Telekom, which owns T-Mobile, held detailed discussions with its Slovak unit regarding a purchase of the government-held stake before the IPO was announced, a person with knowledge of the talks told the Financial Times. The German company, which will not dilute its holding in the IPO, has the right of first refusal to the stake, but a representative declined to comment on whether it intended to increase its stake.

"Deutsche Telekom considers its responsibility with regard to Slovak Telekom to be that of a long-term, strategic partner. We do not comment further on internal talks between shareholders," spokeswoman Sylvia Braunle said in a statement.

Last year, Slovak Telekom reported adjusted earnings before interest, tax, depreciation and amortisation of €311m on revenues of €768m, with an operating free cash flow of €195m.

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Extra cash could also help fund Slovak prime minister Robert Fico's push to increase handouts and tax breaks to voters, with elections approaching next year.

Slovak national retail investors will be offered a 5 per cent discount on share purchases up to €10,000, the company said in a statement.

The offering will primarily place shares on the Bratislava Stock Exchange, with global depositary receipts listed on the London Stock Exchange.

Citigroup and JPMorgan are acting as joint global co-ordinators and joint bookrunners and Erste Group and Wood & Co are acting as joint lead managers on the listing.

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