Serbian government extends bid deadline for national telco

The Serbian government has given the sole bidder in its Telekom Srbjia sell-off 15 days to improve its offer. A fortnight ago, it emerged that Telekom Austria’s offer of €800-950m for the mostly-state-owned telco was the only bid received. The Serbian government, which owns 80 per cent of the telco, was hoping to attract offers in excess of €1.4bn for a 51 per cent stake in the company.

While speculation was rife that Telekom Austria’s bid would be rejected, the extension of the timeframe now suggests that both parties are keen to close the deal; in addition to its bid, Telekom Austria has pledged to invest €450m into the company over the next three years. France Telecom, which had expressed early interest in buying into the company, withdrew from the process earlier this year, saying the price tag was too high. Deutsche Telekom’s Greek subsidiary OTE owns 20 per cent of the company but did not apply to increase its stake. The Serbian government is under significant pressure to balance the country’s books under the terms of an international bailout plan; the sale of the telco is intended to help the country meet those requirements. The bid deadline has now been extended to May 3.

If accepted, the proposed deal would see Telecom Austria close to 100 per cent access to Serbia’s fixed-line network and up to 60 per cent of the mobile market in the country. The telco launched VIPnet Serbia in 2007 and currently holds 17 per cent market share there. The Eastern European market are widely perceived to promise more growth than the increasingly saturated Western European market. Telekom Austria also operates in Croatia and Slovenia.

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