Slovenia Rejects Amended Cinven Bid, Sets Sale Deal on Hold

Updated on

Slovenia rejected Cinven Group’s amended offer to buy the majority of Telekom Slovenije d.d., putting the sale of the largest company on the country’s privatization list on hold and raising chances it may fall through.

The “conditions to proceed with the transaction now are not in place,” Cinven said in an e-mailed statement Tuesday, citing a dispute over the regulatory approval of the merger of Telekom’s unit in the Republic of Macedonia as the sticking point.

Slovenian Sovereign Holding refused to accept the June 10 amended offer from the London-based private equity group, saying the changed offer posed “too big a risk,” according to an e-mailed statement sent Monday. The holding is “still ready to complete the transaction” under terms confirmed by its supervisors on June 10, it said. The shares extended their drop, losing more than 9 percent in two days.

Slovenia sought to find balance between selling the company to a non-industry group and showing investors it’s still serious about selling state assets. Telekom is the biggest of 15 firms identified for sale two years ago as the eastern Europe nation recovers from an economic slump.

Changed Offer

Cinven’s changed offer “made it pretty clear the deal fell through,” Radivoj Pregelj, a money manager at the asset-management arm of Zavarovalnica Triglav insurer, said by phone Monday. “This will only cement the conviction that Slovenia is non-friendly to foreign investors.”

Telekom Slovenije dropped 3.6 percent to close at 89.95 euros in Ljubljana after plunging as much as 6 percent earlier in the day. The stock declined to the lowest level since April 2013 on a closing basis, according to data compiled by Bloomberg.

If the sale fails, it would be the second unsuccessful attempt to sell this state asset in the past seven years, after the administration of Premier Janez Jansa rejected bids from Iceland’s Skipti hf and a group of investors led by Bain Capital LLC in 2008.

“If the deal falters, Telekom Slovenije has the same job as if they were acquired by Cinven: optimizing costs, lowering headcount, keeping up with investment and exiting Macedonia,” Saso Stanovnik, chief economist at Ljubljana-based brokerage Alta Invest, said by e-mail Monday.

In that case, Slovenia should reconsider which state companies to sell and “and try and sell another big asset, which would attract more interests than Telekom,” he said.

Prime Minister Miro Cerar sees the sale as “still ongoing” and declined to comment further, his spokeswoman Tina Strafela said in a text message on Monday.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE