ECONOMY

Gov’t hopes to secure up to 29 euros per OTE share from DT

Greece wants as much as 29 euros a share from Deutsche Telekom for its 3 percent stake in OTE, in a deal expected to be finalized within two weeks, a senior government official said yesterday. The German group has already agreed to acquire a 20 percent stake in OTE from buyout firm Marfin Investment Group (MIG) at 26 euros a share or 2.5 billion euros. The Greek government, which owns 28 percent of OTE, has been in talks with Deutsche Telekom since March, hammering out a deal that will see Europe’s largest telecom secure management control. Deutsche Telekom plans to buy a further 2 percent from the market so that both sides have equal shares of the 9.5-billion-euro Greek telecom and together own more than half of the company. «The price for the 3 percent stake will be above MIG’s 26 euros a share and most likely will not exceed 29 euros,» said the official, who requested anonymity. «OTE will join Europe’s strongest telecom group, becoming part of a European champion.» OTE also operates in Bulgaria, Serbia, Romania and Albania. «We are very close to finalizing the deal with Deutsche Telekom, there are some remaining details,» the official said. «The expected agreement will give the Greek state the right to sell an additional stake in OTE at a pre-agreed price.» On Sunday, Finance Minister Giorgos Alogoskoufis, who has retained a steady preference for a large European partner for OTE and stopped MIG from buying more of the group, admitted that some hurdles remained to be worked out – price and management. On Monday, MIG effectively extended a May 7 deadline for the deal with Deutsche Telekom, saying in a bourse filing it now expects to complete the sale of its 20 percent stake in OTE «in the coming two weeks.» Based on the agreement, Greece will propose OTE’s board chairman and Deutsche Telekom will pick the CEO. Greece is seeking the right to veto proposed CEOs up to three times. OTE’s unions remain opposed to the deal, fearing Deutsche Telekom will ax jobs and benefits to wring cost savings. (Reuters) EU says Athens must change takeover law BRUSSELS (Reuters) – The European Commission said yesterday it has given Greece two months to change a national law used to block a potential takeover of domestic telecoms group OTE. Greece has introduced two sets of approval requirements for acquiring more than 20 percent in what the government deems to be strategic companies, the European Commission spokesman said. «For these reasons the new provision on investment in strategic companies is considered to be incompatible with the free movement of capital,» he said. The Commission had decided to launch a legal action against Greece and has given it two months to reply, the spokesman said. The recently adopted law was used to stop buyout company Marfin from building a controlling stake in OTE. Greece prefers to have a major European telecoms company as a partner for OTE. «The European Commission is not talking about lifting the restriction but changes in the law. We are waiting to see what changes it is requesting,» said a Greek Finance Ministry official who requested anonymity. «We will be in full cooperation with the EU Commission.» Greek law stipulates anyone wanting to own over 20 percent of a strategic company must obtain authorization from the government. The legal action against Greece takes the form of a letter of formal notice, the first of a three-stage process that ends in the EU’s top court, the European Court of Justice. EU Internal Market Commissioner Charlie McCreevy is also battling Germany to make sufficient changes to a law that shields domestic carmaker Volkswagen from takeovers. The ECJ found the so-called VW Law unjustified.