DT cautious about OTE stake price and squeeze-out offering

There are two issues apparently concerning Deutsche Telekom regarding the future of the Greek state’s holding in local telecom giant OTE. The first is whether it can avoid submitting a public offering for minority stakes if it acquires the 10-percent stake of OTE to increase its holding to 50 percent, and the second regards the cost of the stake that remains in Greek hands.

There were conflicting reports on Friday about which way the German telecom group intends to go. Bloomberg reported the submission of a proposal for the acquisition of Greece’s 10-percent holding in OTE. The news agency cited anonymous sources from DT and spoke of ongoing talks that are focusing on the price of the shares to change hands.

Reuters, however, cited an e-mail by Deutsche Telekom spokeswoman Elpida Trizi in Bonn that dismissed the reports as “rumors and speculation on which we do not comment.”

It does appear, however, that DT has already contacted the Greek government in order to discuss the acquisition of the state’s remaining stake in OTE. The talks are apparently under way and preceded a visit to Athens on Thursday of the German company’s new head, Timotheus Hoettges, with market professionals saying they began in the summer.

The Greek side seemed at the time to have resisted the temptation to sell its stake – held jointly by the state and Social Security Foundation – as it anticipated better days on the stock market that would raise OTE’s share price and therefore the state’s revenues upon the 10-percent stake’s sale. Now that the stock of OTE has indeed gone up, along with the rest of the bourse, talks appear to have restarted.

Reliable sources say that DT has it eye firmly fixed on acquiring the 10-percent stake, but only as long as it is not forced to submit a public offering for squeezing out the remaining minority stakeholders.

The German side, well-informed sources suggest, insists on the terms of a shareholders’ agreement signed in 2008, which provides for the sale of the Greek state’s shares through a tender in which DT will retain the right of first refusal. All signs point to DT expecting that this specific process will safeguard it legally in case it decides against submitting a public squeeze-out offering.

Greece’s 10-percent stake corresponds to 49 million OTE shares, which based on Friday’s bourse closing are priced at some 525 million euros. OTE’s stock ended the day with a 2.8 percent rise to 10.74 euros, while in the course of the session it managed to temporarily climb above 11 euros.