News of Telenor selling its Eastern and Central European stakes were frequent recently. Hungary might be concerned in this, but the Norwegian company has not commented on these news until now. Portfolio.hu reports that an official statement has been released which states that Telenor received an offer for its stakes in Bulgaria, Serbia, Montenegro and Hungary.
According to a statement published on Telenor’s official website, a voluntary and obligation-free offer has been made for the company’s Eastern and Central European base, which includes Hungary, Bulgaria, Serbia and Montenegro. Bearing in mind the shareholder’s value, Telenor will examine the offer in the first quarter of the year and then decide whether to accept it or not. The examination process will not affect the operation of Telenor, nor the clients or the employees.
Who could be the buyer?
According to specialist news provider Mergermarket, Telenor had talks with an American investing base for selling the stakes as mentioned earlier for 2 billion euros. Bulgarian business news outlet Capital found out that the prospective buyer was chosen already in December. Specialists believe that the buyer could be the global investor KKR, which has several stakes in the region, among many others a Serbian satellite TV provider. However, according to other sources, the buyer is not yet active in the area. Thus it is not yet sure that KKR will be the winner.
Based on the news so far, we are talking about an investor who has no stakes in the region yet.
Why would Telenor leave?
There are several reasons behind the sell:
- On a group level, these four countries are not so significant: out of the 176 million clients, Telenor has 9.6 million in the region, that is 5.5 percent of the whole clientele. This means 3.1 million clients in Hungary, 3.2 in Bulgaria, and 3.3 in Serbia and Montenegro. The income of these four countries is the 9 percent of the whole, and 8 percent of the EBITDA.
- The number of clients has declined significantly in the past couple of years in these four countries. According to the latest surveys, compared to 2015, Telenor lost 147 thousand clients in Hungary, 581 thousand in Bulgaria, and 229 thousand in Serbia and Montenegro.
Why Hungary too?
Previously, news were only about the Bulgarian and Serbia, and Montenegro leave, but rumours appeared concerning Hungary as well early this week. This is not surprising as Telenor has been dealing with the four countries as one, as the Norwegian company has established an Eastern-Central European cluster involving Bulgaria, Hungary, Serbia and Montenegro.
At the head of this cluster is Alexandra Reich, who is the CEO of Telenor Hungary since October 2016.
Quotation has increased
Investors are happy to hear this announcement, as the quotation of Telenor has grown 1 percent on the 27th of January following the fall of the previous days.