FT denies reduced share offer for TPSA stake
By : Roseanne Gerin
On the eve of its deadline to exercise an option to purchase an additional 10% of Telekomunikacja Polska (TPSA), France Telecom (FT) last week denied a local press report that it had offered the Treasury Ministry a reduced share price of zl. 25 for the stake.
"We have an option to gain 10% of TPSA and it's not been finalized and it remains one option," said a France Telecom press officer who declined to be identified. "The situation is that France Telecom doesn't intend to exercise the option on the conditions fixed last year and the current price."
When FT and local firm Kulczyk Holding bought 35% of telecom monopolist TPSA for zl. 18.6 billion ($4.3 billion), or zl. 38 per share, in July 2000, the Treasury Ministry gave them an option to purchase an another 10% of TPSA's shares for zl. 40 each by July 31, 2001. Since then, TPSA's share price has dropped by more than half to zl. 16.40 last Friday. FT said earlier this year that it would not buy the additional shares at zl. 40 each, given TPSA's low share price.
Responding to last Wednesday's press report that stated the French had offered the ministry zl. 25 per share, someone with knowledge of the negotiations said, "The Polish press is incredibly inflammatory on such an offer."
Agnieszka Dluska from the Treasury Ministry's press office said the ministry had not received any written offers for the 10% stake. When asked about the lowest share price the treasury would accept from FT, she said, "An agreement is an agreement and the terms are binding."
The treasury stated earlier this month that it might issue convertible bonds for up to 30% of TPSA's shares if FT did not exercise its option. In addition, a press report last week quoted a source close to the transaction who said that the treasury might seek another investor for TPSA. News agencies and local analysts said the measure was meant to pressure the French into buying the additional shares above market value since the treasury needed a cash windfall from the sale to boost state coffers.
"It's obvious for me that France Telecom is concerned by such ideas," said a source familiar with the company's plans in Poland, who declined to be identified. "I don't know if it's possible or if it's a game from the ministry."
Dluska, however, declined to say if other investors had expressed an interest in buying the shares, but added that the ministry was considering issuing convertible bonds if FT did not exercise its option. "After July 31, the ministry will be able to finally decide what to do with the shares of TPSA it has," she said.
TPSA's spokesman Piotr Gawron did not return phone messages. Artur Zak from TPSA's investor relations department said that for the next three months all questions from the press had to be submitted in writing due to TPSA's negotiations with FT. Nevertheless, he did not respond to questions sent via e-mail.
The treasury intends to publicly float another 20% of TPSA's shares on the Warsaw Stock Exchange (WSE) later this year. FT has an option to buy 6% of those shares.
