ITI completes share acquisition in Optimus
By : Anna Kocinska
Media and entertainment group ITI Holdings (ITI), owner of private broadcaster TVN, last week completed its share acquisition in computer maker Optimus from BRE Bank and Zbigniew Jakubas, paving the way for the deal to be finalized later this year.
In a public tender last November, ITI purchased a 20.2% stake or 49.9% of the voting rights in Nowy Sacz-based Optimus. The domestic computer firm controls 85% of systems integrator DRQ and 75% of Internet portal onet.pl ITI's main goal in the transaction. ITI, which bought 25% of onet.pl in a separate deal, aims to become a multimedia powerhouse with assets in television, the Internet, film production and movie theaters.
ITI purchased onet.pl's shares for zl. 386.4 million ($96.4 million) in convertible bonds and cash. Mariusz Walter, the former president of TVN and one of the founding shareholders of ITI, will become the chairman of the supervisory boards of both onet.pl and DRQ.
According to Jan Wejchert, ITI's chief executive officer, adding onet.pl and DRQ to the company's portfolio will bolster the group's market position. However, despite the shared enthusiasm of BRE Bank and ITI last week, lingering questions threaten to jeopardize the company's planned public offering on the Warsaw Stock Exchange (WSE) this year. "For BRE, (the acquisition of Optimus' shares in a public tender) is only the first step in this transaction," said Jakub Papierski, analyst at Deutsche Bank. "It (BRE Bank) did switch its exposure from Optimus to ITI, but the success of the transaction depends on the conversion of (ITI bonds that it holds) into (shares in ITI)." ITI paid BRE Bank mainly in three-year convertible bonds for its stake in Optimus.
Under the agreement between the two companies, the conversion price will equal the price of ITI's shares in the public offering. But if the value of 100% of ITI amounts to less than $1 billion, ITI will have the right to rescind the conversion option from the bond holder. That condition was added to last year's agreement only this year. According to analysts who asked not to be named, this may be the reason for the possible delay in ITI's public offering. "BRE probably wants to convert the bonds (into shares) but the market is down and it might be afraid of ITI's evaluation being fixed at the level, which could attract buyers but be less than $1 billion," one analyst said. "So I think that (BRE Bank) might be willing to renegotiate that $1 billion threshold." If BRE Bank loses the option to convert the bonds it will also lose out on any potential growth of ITI's shares on the WSE.
In May, Wejchert told Reuters he planned to list the company in October. ITI is already listed on the Luxembourg Stock Exchange (LSE), where it is valued at $300 million. Wejchert said the company's share price on the WSE should reflect ITI's real value of $1 billion. He also said the company's Warsaw offering could raise up to $200 million, which could be used to create new TV channels and develop Multikino, ITI's network of cinemas. Wejchert said 80% of ITI's shares would be listed on the WSE while the rest would be listed on the LSE. But according to analysts, considering the general downward trend on the market, October might not be a good time for ITI to launch in Warsaw.
"I wouldn't be surprised if they changed the date of the offering," Papierski said.
Unfavorable economic conditions are not the only reason why ITI's offering might be postponed. In September, the Treasury Ministry plans to announce a public tender for 14-30% of Telekomunikacja Polska (TPSA). In addition, according to Treasury Minister Aldona Kamela-Sowinska, the privatization of Powszechny Zaklad Ubezpieczen (PZU), Poland's largest insurance company, is also possible this year. The ministry's plan is to sell 50% of PZU shares, including a 20% stake reserved for the Netherlands-based Eureko, which, along with BIG Bank Gdanski, already controls 30% of PZU. Such a large market offering might draw investors' attention away from ITI, analysts said. "We're still planning ITI's public offering for this year, in October or November," Michal Broniatowski of ITI Corp. said last week. "But obviously it all depends on market conditions."
