Telekom Srbija, Serbia's largest telephone company, won a controlling stake in Bosnia's Telekom Srpske for €646 million ($860 million), outbidding sole rival Telekom Austria AG.
The Bosnian government accepted Belgrade-based Telekom Srbija's offer for a 65% stake in Telekom Srpske, said an official at the Banja Luka, Bosnia-based state-asset agency who asked not to be named by phone today. Vienna-based Telekom Austria offered €467 million. The Bosnian Serbs are seeking to open up the former Yugoslav republic's economy and seek closer ties with the European Union by attracting investments in phone and power assets.
The stake sale to Telekom Srbija, which creates an enlarged Serbian phone company controlled from Belgrade, quashed attempts by investors such as Telekom Austria, to expand in the Balkans. Shares of Telekom Austria rose 3 cents, or 0.2%, to €19.63 in Vienna. Hellenic Telecommunications Organization SA, the Greek phone company that owns a fifth of Telekom Srbija, rose 10 cents, or 0.5%, to €22 in Athens. Banja Luka-based Telekom Srpske has about 570,000 wireless customers and 350,000 fixed-line clients, according to Telekom Austria. Telekom Srpske reported profit of 80.4 million convertible marks ($54.8 million) on sales of 344 million marks last year, according to the company's Web site.
For Telekom Austria, the largest Austrian phone company, it's the third time the operator fails in winning a bid for assets outside its home market. Telekom Austria lost bids earlier this year for Mobi 63 and a mobile-phone permit in Slovakia. In July, Serbia sold Mobi 63, a mobile-phone operator, to Norway's Telenor ASA for €1.51 billion.
Telekom Austria Vice Chairman Rudolf Fischer said in an interview last month that Telekom Austria isn't prepared to overpay for the Bosnia phone stake. The Austrian company will „continue to closely monitor the outcome of the negotiations and is prepared to start negotiating with the directorate if the negotiations with the higher bidder fail,” it said in a statement yesterday. Telekom Austria sells mobile-phone services in Croatia, Slovenia, Bulgaria as well as Austria. It won Serbia's third cellular permit last month after losing out to Telenor in the Mobi 63 auction.
Telenor, France Telecom SA, Deutsche Telekom AG's Magyar Telekom Nyrt unit, Novator of Iceland and a unit of Russia's AFK Sistema had earlier indicated interest in bidding and didn't submit offers at the end. CEZ AS, the largest power company in the Czech Republic, said on December 4 it had agreed to invest about €1.5 billion in a project to build a new coal-fired power plant in Bosnia - Herzegovina. (Bloomberg)