TIM’s merger with Troy GAC hits an obstacle

TCS Capital, the largest minority shareholder in TIM Hellas, went to court yesterday in a bid to block the merger of the Greek mobile phone firm with Troy GAC Telecommunications, saying the cash offer was too low. «The price they are paying is five times EBITDA. Every transaction we have seen is higher, with the average figure at 7.9 times EBITDA. They are paying way below the average,» Eric Semler, president of New York-based TCS Capital, told Reuters. The fund, which manages $1.5 billion (1.25 million euros), holds a 5.4 percent stake in TIM Hellas, Greece’s third-largest mobile operator. In July, TIM Hellas said it had agreed to merge with Troy GAC Telecommunications, which holds an 80.87 percent stake in the Greek firm. Troy GAC is owned by private equity firms Apax Partners and Texas Pacific Group. TIM Hellas and Troy GAC also launched a cash-out merger, offering 16.4 euros per share to minority shareholders, the same price Apax and Texas Pacific had paid Italy’s TIM for 80.87 percent of the Greek operator. «A fair price would be at least 25 euros per share, based on historical transactions,» said Semler. «We are going to court to prevent this cash-out merger happening. Apax and TPG are forcing minority shareholders to sell. Greek law does not allow minority shareholders to be squeezed out,» he added. Semler said he had the support of other minority shareholders. TIM Hellas said it had no comment to make regarding TCS Capital’s court action. Earlier this month, TCS Capital forced TIM Hellas to adjourn an extraordinary shareholders’ meeting called to vote on the cash-out merger. It has been rescheduled to November 2. (Reuters)