2nd UPDATE: Solorz-Zak Close To Deal For Polkomtel - Source
June 30 2011 - 2:07PM
Dow Jones News
Polish businessman Zygmunt Solorz-Zak is close to signing a deal
to buy Polish mobile operator Polkomtel SA for around $6.6 billion,
a person familiar with the situation said Thursday, in what would
be the largest buyout in the European telecommunications sector
this year.
The deal is expected to be signed by Solorz-Zak and Polkomtel's
shareholders Thursday, the person added.
The sale process, launched in January, was complex because of
Polkomtel's ownership structure and the government's involvement.
The sale is part of Poland's wide-ranging privatization program
that raised PLN22 billion from asset sales last year, with PLN15
billion in asset sale revenue expected in 2011.
The program is aimed at reducing government ownership in a
limited list of large strategic companies to between 25% and 30% by
2013, while completely selling off or liquidating hundreds of
inefficient small- and medium-sized companies.
Solorz-Zak was competing for the company, one of three major
mobile phone operators in Poland, with private equity firm Apax and
Norway's Telenor ASA (TEL.OS), according to people familiar with
the matter, and securing the deal significantly expands his media
and communications empire.
Solorz-Zak's personal wealth has been estimated at PLN7.2
billion, much of it tied up in his majority stake in television
broadcaster Cyfrowy Polsat SA (CPS.WA). He is looking to sell part
of the stake to finance his telecom investments, Cyfrowy Polsat
said in a statement earlier this month.
Solorz-Zak and his business partner Hieronim Ruta directly and
indirectly control about 70% of the broadcaster, which is valued at
around $2 billion at the current stock price. He plans to retain a
majority of shares after the sale.
The imminent sale of Vodafone Group PLC's (VOD) 24.39% stake in
Polkomtel, meanwhile, completes the mobile giant's year-long
campaign of shedding minority holdings, leaving Chief Executive
Vittorio Colao free to focus on how to make the most of surging
demand for mobile data and from the company's vast operations
across Europe, India and Africa.
Vodafone's likely exit from Polkomtel comes two months after the
sale of its 44% stake in French telecommunications operator SFR for
EUR7.95 billion to Vivideni SA (VIV.FR). Last year, Vodafone also
sold its minority holdings in Japan and China to focus on key areas
of growth potential, including mobile data, enterprise and emerging
markets.
U.K.-based Vodafone has pledged to return most of the sale money
to shareholders via share buybacks. But it has also been spending
some cash, having recently agreed to pay $5 billion to buy out its
joint-venture partner in India to strengthen its position in a
challenging market.
Polkomtel's other shareholders include oil refiner PKN Orlen SA
(PKN.WA) and copper miner KGHM Polska Miedz SA (KGH.WA) which both
own 24.39%, as well as Poland's largest power group PGE Polska
Grupa Energetyczna SA (PPOLF) which holds a 21.85% stake. The
Polish Treasury holds stakes in the three owners of 27.52%, 31.79%
and 84.99% respectively. Coal miner Weglokoks SA, which is wholly
owned by the Treasury, and holds a 4.98% stake in Polkomtel.
-By Lilly Vitorovich, Dow Jones Newswires; +44 207 842 9290;
lilly.vitorovich@dowjones.com