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MTel owner DT acquires last T-Mobile Czech Republic shares

Deals

Deutsche Telekom (DT), majority owners of Magyar Telekom (MTel), have bought out the remaining 40% of shares available in its subsidiary T-Mobile Czech Republic. According to an insider source quoted in a story by Reuters news agency, the transaction will see DT making an €800 million buyout to “take full control of the unit.”

According to DT statistics, the company’s previously-held stake was valued at €1.75 billion at year’s end 2013.

Local business news outlet Portfolio.hu naturally took the next step in speculating on DT’s next move in the region, wondering about the very real possibility of the Germany-based company buying up the 40.7% stake remaining in MTel; the outstanding shares currently carry a market value of nearly €420 million.

“Whereas DT fully finances Magyar Telekom, it is entitled only to 59% of the company’s dividend, therefore delisting MTel could seem like a logical move,” Portfolio opines. “It does so especially in light of the fact that MTel appears to be cheap based on several indicators. MTel is the cheapest stock in the region on an EV/EBITDA basis, an indicator most closely watched by investors.”

Recent large-scale moves by DT to consolidate throughout Europe represent an interesting 180º about-face in company policy. As recently as August, the Wall Street Journal noted that, in an overhaul of its Eastern European activities, DT could “even result in selling assets” including those in the Czech Republic.

The taking over of Timotheus Höttges as Deutsche Telekom CEO on January 1 appears to have made no effect in the company’s recent aggressive buying spree after the departure of Rene Obermann: In November, DT purchased the operations of Germany-based fiber-optics infrastructure provider GTS Central Europe for €546 million.

And last week, a Bloomberg report (also via anonymous insider sources) had DT acquiring the remaining 10% stake in Hellenic Telecommunications Organization owned by the Greek government. DT currently owns a 40% stake in the telephone company.

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