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. Last Updated: 07/27/2016

Two Bid for Polish Telecom




WARSAW, Poland -- Poland has received just two bids in its largest state sale, the privatization of a 25 percent to 35 percent stake in telecoms firm TPSA, dimming government hopes that it would earn a hefty premium for the company, analysts say.


Formerly interested parties such as British Telecom and Germany's Deutsche Telekom declined to bid in the face of treasury hints that France Telecom and U.S. firm SBC Communications Inc. were thefrontrunners.


Sources close to the deal say the latter two companies duly declared their interest and are now likely to comprise the short-list the treasury ministry will announce Sept. 3. The sale is due to be completed by the end of the year.


With TPSA's current market capitalization at $9.5 billion, a 25 percent stake is worth $2.4 billion and a 35 percent stake would fetch $3.3 billion.


The telecoms minister had signaled the government wanted $3.5 billion to $5 billion for the stake, with firms expected to pay a premium for TPSA's 9 million subscribers, monopoly on international calls and mobile phone operation.


Analysts queried the state's financial ambitions, despite TPSA's market dominance and the scope for growth in a nation with few telephone lines per capita.


"We should not expect any significant premium over the market price," said Vladimir Postolovsky, an analyst at Salomon Smith Barney in London.


TPSA's weak spots include the current management's reluctance to dismiss any of its 70,000 workers despite extensive overstaffing, market liberalization and the need to invest heavily in restructuring to stay competitive.