Slim to build Telekom Austria into European player
By Georgina Prodhan and Angelika Gruber
VIENNA (Reuters) - Carlos Slim plans to use Telekom Austria (TELA.VI: Cotización) as a base to build a European telecoms network after sealing an eleventh-hour deal with the Austrian state to take control of the company.
Slim's America Movil (AMXL.MX: Cotización) will invest up to 1 billion euros ($1.38 billion) in Telekom Austria via a rights issue, on top of spending as much as $2 billion to buy out minority shareholders in a mandatory public offer.
The deal represents the first successful acquisition for Slim in Europe, where he has invested more than $4 billion in the past two years building stakes in Telekom Austria and Dutch KPN KPN.AS, which subsequently rejected a full takeover offer.
America Movil - which is controlled by Slim, one of the world's richest people - said it would spend the money from the rights issue on acquisitions in new markets, infrastructure, research and development, new products and services.
The Austrian OIAG state holding company, which signed a co-ownership deal with America Movil late on Wednesday night, said the partnership set the course for a "massive future growth path for Telekom Austria in CEE (central and eastern Europe)".
Telekom Austria is in seven CEE countries outside Austria but has restricted itself in recent years to modest acquisitions in markets where it is already active as it battled fierce price competition at home while trying to limit its debt leverage.
Shares in the former state monopoly jumped 6.7 percent to 7.10 euros on Thursday after America Movil said it would offer 7.15 euros per share for the outstanding stock in an offer to be launched in the next few weeks.
The shareholders deal combines the OIAG's 28 percent of Telekom Austria with Slim's 27 percent in a syndicate holding structure. Slim will fund the takeover offer, and the OIAG will reduce its stake to 25 percent in the rights issue. Continuación...