Seven groups have been shortlisted for the second round of bidding in the auction for Polish mobile phone company Polkomtel, Reuters reported. The next round of bids are due in April, Reuters said, with a joint offer from private equity firms TPG Capital and Blackstone expected to compete with proposals from buyout shops Apax Partners, Kohlberg Kravis Roberts & Co., Providence Equity Partners, and Polish tycoon Zygmunt Solorz Zak, among others.
(Reuters) – Around seven groups have been shortlisted for the second round of the multi-billion euro auction for Polkomtel [PTL.UL], Poland’s No.2 mobile phone company, people familiar with the matter said on Monday.
Binding offers are due next month, the people said, with a joint offer from TPG [TPG.UL] and Blackstone (BX.N) competing with proposals from Apax [APAX.UL], KKR (KKR.N), Providence, Polish tycoon Zygmunt Solorz Zak, TeliaSonera (TLSN.ST) and Telenor TEL.OS.
Bankers said early in the process that Polkomtel was worth around 4 billion euros ($5.6 billion), but the people said there was enough appetite in the debt markets to stretch the valuation to at least 5 billion euros if bidders wanted to offer more.
Naguib Sawiris’s Orascom Telecom (ORTE.CA) and Carlos Slim’s America Movil (AMXL.MX) placed first round offers, but are not on the shortlist, the people added.
Polkomtel, which ended 2010 with net profit of 1.15 billion zlotys ($405.5 million) on sales of 7.67 billion zlotys, is owned by Britain’s Vodafone Group (VOD.L) and state-run Polish companies PGE PGEP.WA, KGHM (KGHM.WA), PKN (PKNA.WA) and Weglokoks.
Vodafone is selling because its shareholders want it to tidy up its foreign investments and the Polish shareholders are seeking cash to invest elsewhere.
FINANCING AVAILABLE In addition to debt provided by banks, a private equity buyer would need to put around 1.5 billion to 2 billion euros in equity towards the purchase price, people who have seen the company’s information memorandum said.
Polkomtel expects to generate earnings this year before interest, tax, depreciation and amortization of 2.9 billion zlotys (730 million euros), according to the document, the people said.
“I think (private equity) bidders could quite comfortably raise about five turns of leverage (3.65 billion euros) from the debt markets to fund this. That is conservative,” one of the people said.
Other people said that up to six times leverage, or 4.4 billion euros, was financeable from the debt markets in a combination of loans and high-yield bonds. ($1=2.836 Zloty) ($1=.7131 Euro) (Additional reporting by Megan Davies in New York and Simon Meads in London; Editing by Jon Loades-Carter)