One of the most active events traded on the stock exchange and especially on its prominent SPAD segment is esk Telecom recently. The large fluctuations are mainly due to the delayed privatization of 51% of the share. The discrepancies were mainly caused by the way in which it will be implemented. Will it be better to sell it through the capital market or directly to the investor?
esk Telecom (Tc) is the largest provider of telecommunications services in our market. This position is mainly a historical factor. Recently, this company was the only one that dealt with the provision of fixed telephone connections. Not much has been written about its dominant position in the fixed telephone connections segment and the related misalignment in the telecommunications services market, and there is no need to discuss it.
The regulation of the Czech telecommunications series has recently had a negative impact on the company’s finances, which mainly warms the company’s traditional sources of income, especially call charges and other fees. However, the expanding competitive environment requires the company to expand its services and change its orientation to other market segments, such as data transfer. It is obviously clear from the development that the change of the company to this market segment appears to be very promising from the point of view of growth. Last year, the company bought a 49% stake in the mobile operator Eurotel and is currently its 100% owner.
How se Telecom dr in thunderstorms?
In the last few weeks on burst stock market discovers a small title, their shares would record a few percent loss in one day, even through the fact that, despite the results of the season, the company announces good results. Sales and profits are growing, the decline in fixed telephone connections is offset by the growth in the use of data services, and the Eurotel subsidiary is also presenting its favor. So where is the problem?
All the good and market-expected results were completely obscured a week ago by the fact that the commission for the sale of 51% of the stake in the Czech Telecom recommended the government privatization through capital market. This does not mean that the government has to decide so, but at first it affected the title unfavorably.
Investing in the fund is finally simplified. tteHERE
During the week, however, she corrected the loss of the walls, even though she had not yet reached the original level. The reason is mainly contradictory reactions to the deliberations of the commission and different opinions on the suitability of individual variants. You had a commission to vote for you. Selling a majority stake to a strategic investor, through the capital market, or a combination of both, would first seek a suitable investor. At the same time, sales through the market would be prepared, in case there would be no suitable bidder. Each way has its own supporters and squabbles, even within the government itself, the views are different. She would like to decide by the end of the year.
The stock market is transparent
Although on the day of the announcement of the commission, Tc shares recorded a sharp drop of several percent (-5.23%), the reactions of analysts and investors are quite favorable to this method of sale – especially due to its long-term suitability. The main arguments according to the proponents of this variant is mainly that the sale through the stock exchange should save more and do not worsen the financial situation of the company. According to it, it will bring transparency and preservation of tradability action. It would also help the stock exchange itself and the development of the capital market in the US.
Experts also see it as an advantage that when selling through the stock exchange, it is practically impossible to concentrate ownership or to take it for granted. Due to thorn capitalization companies and now liquidity the company would have to buy the entire volume of the trade for several msc. However, it would risk a sharp increase in stock prices and it would no longer make sense for them. With a wall together, it would take more than a year, which does not seem very effective. There are also opinions that even Tc is not large enough to prevent the concentration of the chapter and eventually happen, and the government choose any alternative.
The investor will pay me vc
According to his representative, the main argument of the sale to a strategic investor is to obtain a majority shareholding and a strategic investor who would promise further know-how and involve the operator in international relations. According to estimates, the premium should reach a maximum limit of around 10-15%. In addition, privatization
Do not earn pensions in banks. The value is in the funds.
companies are primarily interested in financial investors who may not be willing to pay the required premium. Investor strategies would appear only if the tender rules would explicitly require it.
Although some European telecommunications companies, such as Vodafone, Orange, or dnsk company DTF, time but acquisition does not drink in telecommunications. Large European companies have drowned large pensions in three hundred generations, which are the music of the future and investment has not been made in the near future. Companies do not have the ability to invest and a financial investor could be interested in Tc. However, this may prove to be a bad choice, because its goal can only be the maximum financial gain and not the development of the company. Direct sales may prove to be a way to earn many pensions, but the effect will only be short-lived.
How the whole situation will turn out in the end, it will depend on the decision of the government, which does not have to be the decision of the commission. In any case, its goal is not the development of the capital market, but the growth of the economy and economic development. Due to the different patterns, the government will try to find out the preliminary offers and only then decide on the method of sale. The current market value of the company’s share is about 50 billion K and estimates of how much it could spend on sales are around 60-65 billion K.
Which alternative to selling the company would you recommend? Do you think that it is better to focus on the short-term benefit of selling to an investor, or is it better to have a long-term prospect of selling on the stock exchange? Drinks them with light.