Magyar Telekom Slumps as Buyout Bets Seen Fading: Budapest Mover

Magyar Telekom Nyrt. fell the most in more than five months as bets for a takeover by majority owner Deutsche Telekom AG faded after the parent’s plans to sell a U.S. mobile unit were said to fail.

Hungary’s largest telecommunications company fell 3.7 percent to 361 forint by close in Budapest, the biggest drop since Feb. 21. The stock led decliners in the BUX index, which slid 1.7 percent. About 3.7 million shares were traded, almost three times the three-month daily average.

Deutsche Telekom, which owns 59 percent of Magyar Telekom, ended talks with Sprint Corp. over the sale of its U.S. T-Mobile unit, a person with knowledge of the matter said. The Hungarian company, scheduled to report second-quarter earnings tomorrow, has risen 15 percent this year on bets its parent may offer to buy outstanding shares after a similar step in the Czech Republic and other purchases in eastern Europe.

“Some market players had expected Deutsche Telekom to launch a bid for Magyar Telekom backed by funds from the U.S. deal,” Akos Kuti, a Budapest-based analyst at Equilor Befektetesi Zrt., said by e-mail. As the deal failed, the share may face “short term weakness,” he said.

The stock’s 14-day relative strength index fell to 51 from 72 yesterday, retreating from the 70 level that some analysts see as a signal a security is overbought. Eight analysts recommend selling Magyar Telekom, while four have a hold rating and three say buy, according to data collected by Bloomberg.

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