No telling
By : Roseanne Gerin
Energy and telecom powerhouse Elektrim is not obliged to make a decision by this Friday to accept or reject a Deutsche Telekom proposal that would determine the firm's future strategy, ownership structure and the reorganization of its lucrative mobile unit, an Elektrim official said last week.
Elektrim spokesman Piotr Czarnowski said the Polish firm's new supervisory board would not have to decide by the end of the week whether to accept the German firm's proposal to consolidate Elektrim's telephone and Internet holdings under the firm's wireless unit, Polska Telefonia Cyfrowa (PTC). In the deal, Telekom would purchase an additional 3.45% stake of PTC for $400 million, giving it a controlling stake. The Germans already control 49% of PTC 45% directly and 4% indirectly through a holding company. Under Telekom's plan, PTC would eventually be spun off as a publicly traded company.
Telekom set a June 8 deadline for Elektrim to approve the deal. Elektrim has agreed to the date.
Stephan Broszio, a Deutsche Telekom spokesman, said that as far as his firm was concerned Elektrim would make a decision by Friday, but was not obligated to do so. He said he would not speculate on whether Telekom would rescind its proposal or extend the deadline if Elektrim did not reach a decision on the German's offer by the cutoff date.
Elektrim's supervisory board is evaluating offers from Telekom and Vivendi Universal, the two European firms fighting for control of PTC, Poland's largest mobile-phone operator. Vivendi and Elektrim jointly own the remaining 51% stake of PTC.
French environmental, media and telecom conglomerate Vivendi has proposed merging Elektrim's telecom subsidiary, Elektrim Telekomunikacja (ET), into its parent company. Vivendi would then exchange its 49% shares in ET for new shares in Elektrim, thereby transforming Elektrim into a pure telecom player and enabling it to increase its stake in PTC from 26% to 51%. Vivendi already has significant influence over Elektrim as its largest shareholder with a 10% stake. The proposed share swap would boost Vivendi's 10% stake to almost 50%.
Elektrim's supervisory board will meet this week to "examine initially both offers and issue a direction for the management board to progress," Czarnowski said. Besides the French and German proposals, Elektrim might consider other business plans, although it was "impossible to say at the moment," he said. Czarnowski added that he didn't know if Telekom would extend the deadline if Elektrim's board failed to reach a decision by Friday.
Elektrim's new nine-member supervisory board that was voted in during an extraordinary shareholders meeting last month, includes two Vivendi representatives. However, the two French representatives have been excluded from the special supervisory board committee that is examining the business proposals.
Although some minority shareholders appear to support Telekom's plan, according to previous news reports, Czarnowski said he didn't know if Elektrim's new supervisory board favored one proposal over the other.
Waldemar Siwak, a former sales director at financial firm ABN Amro who was selected as chairman of Elektrim's supervisory board, is serving as the company's interim president of the management board. Michel Picot, a senior executive vice president of Vivendi Telecom International who was chosen as vice chairman of the supervisory board, has replaced Siwak as chairman during the transition period.
