Could this be au revoir?
By : Roseanne Gerin
Telecom conglomerate Elektrim's shareholders want France-based Vivendi to sell its shares in the Polish firm's fixed-line unit to Deutsche Telekom, a source said last week.
"Deutsche Telekom is the stronger partner and minority investors would like to align themselves (with the company)," said the source, who asked not to be identified. "The sooner the situation is resolved the better."
Neither Marc Boudier, the director of Vivendi's Eastern European operations, nor Michel Picot, a vice president who works with Boudier on Elektrim-related business, were available for comment.
Hans Ehnert, a spokesman for German telecom giant Deutsche Telekom, said there were reports that Vivendi, a communications and environmental services group, was planning to sell its shares in Elektrim Telekomunikacja to the German operator, but that he could not comment.
Some industry observers expect competition between Deutsche Telekom and France Telecom to heat up in Poland's telecom sector within the next few years. France Telecom along with the Kulczyk Holding own 35% of Telekomunikacja Polska (TPSA), the country's largest fixed-line operator. In addition, France Telecom owns 34% of Poland's third-largest mobile operator PTK Centertel.
"It's absolutely crucial that Deutsche Telekom comes to an agreement with Vivendi as soon as possible (because Poland's telecom) environment will be getting very competitive with France Telecom and others," the source said.
Vivendi purchased a 49% stake in Elektrim Telekomunikacja for $1.2 billion in 1999. Elektrim owns the remaining 51% stake. In addition, Elektrim Telekomunikacja holds 51% of shares in Polska Telefonia Cyfrowa (Era GSM), the largest mobile operator in Poland, with Deutsche Telekom controlling a 45% stake. Elektrim Telekomunikacja also owns Bresnan cable television company.
"It would make sense for Vivendi to accept an offer subject to the valuation (of shares) from Deutsche Telecom," the source said. He added that Deutsche Telekom has invested heavily in the region, whereas Vivendi has a publicized record of telecom failures in countries in Europe, the Middle East and Africa, and particularly in Hungary and Egypt.
A local news report last week said Vivendi was ready to sell its shares in Elektrim Telekomunikacja to Deutsche Telekom. "With all due respect to the journalist who wrote (the report), she quoted a well-informed source, however unnamed, so we are not going to comment on it," said Ewa Bojar, Elektrim's spokeswoman. She added that she didn't know if Vivendi intended to sell its stake in Elektrim Telekomunikacja.
"If Vivendi intended to sell any shares, there would be an official notification from Vivendi to Elektrim," she said, adding that Elektrim would make an official announcement as well, according to the requirements of the Warsaw Stock Exchange commission.
Bojar also said she didn't know if Elektrim's shareholders wanted Vivendi to sell its shares in Elektrim Telekomunikacja to Deutsche Telekom, and added that it was Elektrim's policy not to comment on speculation. Some of Elektrim's largest institutional shareholders include Templeton Funds, Merging Markets Development, Wood & Co. and Chemia Polska.
Elektrim said previously that by the end of February it would likely sign a contract to sell 51% of shares in all its fixed-line telephone subsidiaries to Deutsche Telekom. The Polish company signed a letter of intent with the German operator last December to complete negotiations on the final sale agreement by the end of this month.
The letter of intent, Bojar said, also included Elektrim's six fixed-line companies that are not included in Elektrim Telekomunikacja's portfolio of holdings. The estimated value of a 51% stake in all six companies is $180 million, she said.
Deutsche Telekom has not taken any further action with regard to the letter of intent, Ehnert said.
