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| The Greeks have a word for it |
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| Thursday, 15 May 2008 | |
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Could it be 'schadenfreude’? German bear sticks its snout into the honey-pot of the Peloponnese.
Deutsche Telekom yesterday reached tentative agreement with Athens to assume day-to-day control of the Greek national telco, OTE. The process has gone smoothly... to date. In March, DT paid €2.55bn for the 19.99% stake in OTE held by the Marfin Investment Group (click here), an Athens-based private equity concern. . Under the new agreement, DT will now pay a further €0.43bn to buy 3% of the Greek government’s 28% stake in OTE. DT will then acquire a further 2% of OTE’s stock on the open market, at a negligible premium, to bring its holding in OTE to 25% plus one vote and its stake, combined with that of the Greek government, to 50% plus one vote. This brings the total cost of the transaction for DT to €3.2bn. Under the deal struck with Athens, however, DT has also acquired the management voting rights attached to the Greek state’s stake – in theory at least. How that will work in practice is anyone’s guess, while in the meantime the pact is subject to approval by the Greek Parliament. Operational control of OTE extends DT’s already impressive portfolio of Balkan assets, which include operations in Croatia, Macedonia, Bulgaria and Montenegro, as well as its central European hub in Hungary, Slovakia, Austria, Poland and the Czech Republic. The Chairman of Deutsche Telekom's Board of Management René Obermann said, "we look forward to working together as partners, with OTE and its employees benefiting as much as Deutsche Telekom. With its highly motivated employees, OTE has built up a strong position in its Greek home market, as well as in Southern and Southeastern Europe in recent years and will therefore be an important partner in the Deutsche Telekom Group." OTE’s employees could rarely if ever have been described as ‘highly motivated’. Indeed, I’d wager that if anyone has ever used that epithet before, they’d have been too fast asleep to notice. Jim Chalmers |
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