Swisscom dials Czech number

Swisscom says it won't pay over the odds for Cesky Telecom Keystone

Switzerland’s main telecommunications provider, Swisscom, has launched a bid for a 51.1 per cent stake in its Czech counterpart, Cesky Telecom.

However, Swisscom – one of four bidders – is keeping quiet about how much it is willing to pay to gain a foothold in the Czech market.

Cesky is the leading Czech telecoms company with 3.5 million fixed-line accesses and 9,000 employees.

Swisscom confirmed on Tuesday that it had put in a bid for the majority stake held by the Czech government but refused to provide any further information.

The main Swiss telecom operator announced it was participating in the bidding process on the final day to submit a bid.

The statement came as no surprise. Earlier in March, Swisscom chief executive, Jens Alder, had indicated that the company was considering the Cesky deal as an attempt to add long-term value.

“But we will not buy at any price,” Alder had emphasised.

Price must be right

Experts say the stake held by the Czech government is worth at least €2.4 billion (SFr 3.7 billion) but the latter has said it hopes for a higher price. Should Prague decide that the bids are not high enough, it has the option to offer its shares on the stock markets.

The other bidders are Spain’s Telefonica, Belgium’s Belgacom and a consortium of the private equity firms Blackstone, CVC Capital Partners and Providence Equity Partners, backed by France Télécom.

The Czech government will pick the successful bidder at the beginning of April, who will then have the chance to bid for the remaining shares in Cesky.

Swisscom’s recent attempts at mergers and acquisitions abroad have not enjoyed much success.

A year ago, it sold off the German mobile phone services provider, debitel, at a loss of SFr2 billion. It also called off merger talks with Austria Telecom in August 2004.

swissinfo with agencies

Key facts

Cesky Telecom is the leading Czech operator with 9,000 employees and 3.5 million fixed-line accesses. Its mobile phone subsidiary, Eurotel, has 4.6 million customers.
The Czech government holds a 51.1% stake in the company.
The Swiss government has a 61.4 % stake in Swisscom, a former state monopoly, which had a workforce of 15,477 last year.