Last week, Hungarian telecom Matáv Rt agreed terms with the Montenegrin government over its planned purchase of the state’s 51.12% stake in Telekom Crne Gore (TCG).
The deal is expected to be approved at the next meeting of the Montenegrin cabinet, although local press reported that there is a deadlock over Matáv’s offer to minority shareholders.
Montenegro’s privatization authority picked Matáv to buy the stake on Jan. 14 this year. Matáv offered €114 million, and has stated that it will invest a further €67 million in the company over the next five years. The Hungarian firm beat out Telekom Slovenije dd, Austria’s Mobilkom AG and Serbia’s Telekom Srbije AD in the bidding.
Matáv’s offer to minority shareholders, if accepted, would give it an additional 16%, thus taking its total stake to two-thirds of the company.
Press reports allege that Matáv offered the minority investors €2.20 per share, in contrast to the €4.70 per share for the government package.
Speaking to pro-Serbian daily newspaper Dan, Nebojsa Medojevic, director of the Podgorica-based Center for Transition, Montenegro’s most influential civil organization, urged prosecutors to annul the main deal.
Matáv has declined to comment so far, but analysts are already pricing the deal into their stock valuations, expecting it to be rubber-stamped.
Mónika Tabányi, an equity analyst at Concorde Securities Rt, said that the relative small size of Telekom Crne Gore means it will not have much effect on Matáv or its share price.
“It’s not too significant. It could add only 3%–5% to the group’s sales. On the other hand, the acquisition could have a significant impact on this year’s dividend payment, which in my view is more important for investors at the moment,” she said.
Tabányi predicted that Matáv will pay a dividend of around Ft 80 per share on 2004 results, up some Ft 10 per share on last year’s payout.
“However, as a result of financing the acquisition, indebtedness will increase up to the high end of the targeted 30%–40% range,” she added.
Credit Suisse First Boston (CSFB) raised its price target on shares of the telecom group to Ft 1,000 from Ft 950, reflecting the view that Matáv has strong underlying cash flow generation and commitment to what CSFB regards as generous cash distribution.
“We view the planned TCG acquisition as a strategic positive, and see an extra Ft 10–Ft 20 per share potential valuation contribution from this asset,” CSFB stated.
Source: BBJ
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17.03.2005