ATHENS--Greece is considering a proposal by German telephone
company Deutsche Telekom AG to buy the last 10% stake in its former
telecom monopoly, something that would bring desperately needed
cash into Greece's sputtering privitization program.
However, discussions remain at a very early stage, said a Greek
government official familiar with the proposal, and any agreement
will depend on the sales price.
The German company already controls 40% of the Hellenic
Telecommunications Organization SA, Greece's one-time state
telephone company, which continues to dominate the country's local
telecom market and is a leading player in southeast Europe. Under
the terms of a 2008 agreement signed with the government, Deutsche
Telekom has the right of first refusal to buy the government's
remaining stake in OTE should it decide to sell.
"Clearly the Deutsche Telekom proposal is of interest to us. OTE
is part of the government's privatization drive," said the
official. "There is interest from both sides, but the discussions
are very preliminary and we are at the very beginning of the
process."
According to the official, the proposal was floated during a
meeting this week in Athens between Greek Prime Minister Antonis
Samaras and newly-appointed DT Chief Executive Officer Timotheus
Hoettges. A local Greek newspaper first reported the offer late
Thursday, but DT has declined to comment on the report.
The German telecom company has spent about 4 billion euros ($5.4
billion) building up its position in OTE, paying top dollar--close
to 30 euros a share--with its first purchases in the Greek carrier.
Since then, OTE's shares have tumbled in line with Greece's broader
stock market, trading at only a fraction of their former price.
On Friday, OTE shares closed about 3% higher at EUR10.80, buoyed
by reports of the DT offer. Greece is hoping to raising 3.56
billion euros this year from privatizations. At the current market
price, the government's 10% stake in OTE would be valued at about
EUR530 million, according to market data.
Archibald Preuschat in Frankfurt contributed to this
article.
Write to Alkman Granitsas at alkman.granitsas@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires