VILNIUS - TeliaSonera Sweden's largest telephone company, said it won't raise its bid for shares in its Lithuanian subsidiary, TEO, that it doesn't own yet, reports Bloomberg. The company says it will instead use the funds allocated for the Lithuanian buyout elsewhere, and increase its holdings in Eurasia in case interest in the TEO buyout offer runs low, says Chief Financial Officer Per-Arne Blomquist.
The telecoms company, which entered the Baltic countries in 1991, in September bid 4.8 billion kronor (479.4 million euros) to take control of subsidiaries in the two countries. Some of the minority shareholders, including Danske Bank and East Capital, have rejected the TEO offer as too low.
"What we've done is unconditional, it's also without any pressure; we'll take what we get," said Blomquist. "If we get a couple of percent [of the shares], we won't be satisfied but this means that's the outcome. There's no plan to then come back with another offer if we don't get to a certain level."
Estonia's government on Oct. 5 accepted TeliaSonera's offer for its minority stake in Eesti Telekom on the condition that the Tallinn-based subsidiary pay an extra dividend, of about seven kroons (0.45 euros) per share for this year and 100 percent of net profit for the next three years. The government will receive 93 kroons per share, reports news agency LETA.
The 3 percent of shares that belonged to the state-owned Development Fund were transferred to the Finance Ministry, so the state owns 27 percent of the company. According to the takeover bid rules, the state will hand over its shares by Oct. 16 and payment for the shares, of 4 billion kroons, will take place the same day.
At the extraordinary general meeting of Eesti Telekom's shareholders on Oct. 1, it was decided to pay 964 million kroons, or 6.99 kroons per share, in extra dividends. The dividends will be paid on Oct. 30, to investors of record being fixed on Oct. 15. The state will therefore receive an additional 518 million kroons to its budget income.
The state will use the money from the Telekom sale to cover this year's budget deficit and to supplement reserves. In 2010-2012, Eesti Telekom will have to pay 100 percent of profits to dividends, and the state will receive tax income on that amount.
TeliaSonera owns 60 percent of Lithuanian TEO.