The Serbian government will likely decide against the sale of a 51 percent stake in state run Telekom Srbija to Telekom Austria, the Balkan country’s prime minister said on Tuesday.
“The Serbian government will not sell Telekom Srbija below the minimum price of 1.4 billion euros ($1.9 billion),” Mirko Cvetkovic said in a statement.
On Monday Telekom Austria offered up to 950 million euros for a 51 percent stake in Telekom Srbija, after other companies pulled out over a high minimum price. The bid also envisaged an additional 450 million euros coming in an investment plan, Serbia’s finance ministry said.
“The final decision is on the workgroup tasked with the sale,” Cvetkovic added. “They will make it formal after they complete technical analysis of the offer.” The workgroup has until March 28 to make the decision public.
The Serbian government owns 80 percent of Telekom Srbija, with Greece’s OTE holding the remaining 20 percent.
Also on Tuesday, Telekom Austria’s CEO Hannes Ametsreiter said the company does not need to sell more shares to finance any acquisition of Telekom Srbija and that a capital increase is not planned.
“All our possibilities are open. We are the only one who made an offer…We know exactly what we are prepared to pay and what we are not prepared to pay,” he said.
Telekom Austria’s bid came less than 24 hours after Deutsche Telekom, which had been seen by analysts as a possible suitor for Telekom Srbija, agreed to sell its T-Mobile USA unit to AT&T for $39 billion, the world’s biggest M&A deal this year.
Key Serbian officials, including Cvetkovic have repeatedly said the company would not be sold if the bidders failed to offer the minimum price. In 2009, Telekom Srbija reported 13.3 billion dinars (129.1 million euros) in net profits.
“This (Telekom Austria’s) offer is an insult,” said Predrag Markovic, the telecommunications minister. “This will be my position in the government.”
Serbia wanted to use proceeds from the sale of Telekom Srbija to finance development of infrastructure, boost investments and budget revenues to help assuage social discontent ahead of the 2012 vote and also to pay international creditors.
“The decision against the sale will not jeopardise liquidity of the budget and financing of development projects,” Cvetkovic said.
The prime minister’s statement did not specify whether the company will be offered for privatisation again, but Telekom Srbija’s unions and most analysts have suggested that the government should postpone the sale at least until after general elections, tentatively slated for 2012.