TPSA finalizes details of $26 million WP takeover

Telekomunikacja Polska (TPSA) will spend $26 million on a majority stake in Poland's second most popular Internet portal, Wirtualna Polska (WP). The deal, which has been rumored for weeks, envisages TPSA acquiring the stake in two stages, with the whole transaction to be closed within two months. First, the telecom giant will buy 25% of WP for $9 million from its current shareholders, namely IT integrator Prokom, Centrum Nowych Technologii, Penetrator brokerage and Intel. Later, TPSA will purchase a new issue of WP shares, giving it 50% plus one share. Under the terms of the deal, the other shareholders are given the option to withdraw from WP in 2005 or 2006. TPSA expects the WP portal to attain a positive EBITDA adjusted profit figure in 2004 and a net profit soon afterwards, said Bertrand Le Guern, member of the telecom giant's management board. TPSA will shut down its own Portal.pl, which has been deemed a failure by analysts. According to investment bank CA IB, the Polish internet will be dominated by four portals, namely Onet, WP, Gazeta.pl and Interia. All of them now have as shareholders major companies from the media or telecom sectors. (Gazeta Wyborcza, Oct 27-28, p. 27) T.J.