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FRANKFURT/VIENNA, July 28 (Reuters) - Deutsche Telekom and Telekom Austria are vying for a 58-percent stake in Serbian telephone and Internet operator Telekom Srbija, three people familiar with the matter said.
Serbia earlier this month invited companies to send non-binding offers for the stake by Aug. 2, the first deadline in the privatisation of the telecoms company.
Offers will likely value Telekom Srbija at four to five times its expected earnings before interest, tax, depreciation and amortisation of about 400 million euros ($442 million), the people said.
Deutsche Telekom has made Europe a priority, looking at smaller, bolt-on acquisitions rather than mega-mergers to expand or strengthen its base. It is already Europe's largest telecoms operator by revenue and earlier this year bought full control of Slovak Telekom.
Deutsche Telekom's Greek subsidiary OTE owned a 20 percent stake in Telekom Srbija before selling it in 2011 for 397 million euros.
Carlos Slim's America Movil has said in the past it plans to use its Telekom Austria unit as a base to build up its presence in Eastern Europe. In 2014, it bought Macedonian cable operator Blizoo.
Initially, other bidders such as Russian mobile phone operator MTS had been expected to take part in the auction, the sources said. MTS is now unlikely to show up as it is grappling with a drop in the rouble, they said.
Deutsche Telekom, Telekom Austria and the Serbian government declined to comment.
Serbia is Telekom Srbija's single biggest shareholder with a 58.11 percent stake, while 20 percent is held by the company. The rest is held by small shareholders and employees, with 14.95 percent and 6.94 percent respectively.
The government's last attempt to sell the company failed in 2011 after it rejected an offer of 1.1 billion euros from Telekom Austria for a 51 percent share as being too low. ($1 = 0.9060 euros) (Reporting by Arno Schuetze in Frankfurt and Angelika Gruber, Christoph Steitz in Vienna; additional reporting by Ivana Sekularac in Belgrade and Peter Maushagen in Frankfurt; editing by David Clarke)