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Telefonica Czech Falls Most in Six Months on PPF Buyout Plan

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May 22 (Bloomberg) -- Telefonica Czech Republic AS declined the most in six months after its majority owner said it will buy out minority stakes for less than some investors expected.

The stock fell 1.6 percent to 294.9 koruna at the end of trading in Prague, its biggest drop since Nov. 5, with traded volume at 2.9 times the three-month daily average. The company was the worst performer in the country’s PX stock index.

Czech billionaire Petr Kellner’s PPF Group NV, which bought 66 percent of the phone company from Spain’s Telefonica SA last year, said yesterday after the stock market closed it will offer to buy the rest of the company for 295.15 koruna a share. That compares with yesterday’s end-of-trading price of 299.8 koruna.

“The offer price is lower than most estimates on the market,” Josef Nemy, an analyst at Komercni Banka AS in Prague, who has a sell recommendation for the shares, said by e-mail today. The stock will remain steady “near the offer price” after today’s drop, he said.

Kellner is the richest Czech with a net worth of $11.8 billion, according to the Bloomberg Billionaires Index. Full terms of the offer will be published by June 3, PPF said in an e-mailed statement yesterday.

A “key risk” is that PPF will buy back enough shares to trigger a delisting of the company, according to Vera Sutedja, an analyst at Erste Group Bank AG in Vienna. The Austrian bank had estimated PPF would offer a buyout price of 298.6 koruna, Sutedja wrote in a report to clients today.

“We are rather disappointed with the offer,” she said.

To contact the reporter on this story: Krystof Chamonikolas in Prague at kchamonikola@bloomberg.net

To contact the editors responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net Ash Kumar, Chris Kirkham