DealTalk: Vodafone may sell in 4 billion euro Polkomtel deal

By Victoria Howley

LONDON (BestGrowthStock) – Vodafone Group Plc (VOD.L: ) is prepared to sell its stake in Poland’s Polkomtel, paving the way for what could be Europe’s largest telecom buyout since the pre-crisis takeovers of Wind and TDC.

People familiar with the matter said Vodafone is expected to appoint long-time adviser Goldman Sachs (GS.N: ) to represent its 25 percent stake in Polkomtel — which bankers say could be worth some 4 billion euros ($5.6 billion) in total — when a process for the sale begins as early as next month.

Vodafone and Goldman Sachs declined comment.

Poland’s largest energy producer PGE (PGEP.WA: ), copper miner KGHM (KGHM.WA: ), refiner PKN Orlen (PKNA.WA: ) and coal trader Weglokoks together control the remaining 75 percent of Polkomtel.

The Polish shareholders have appointed their own advisers to work on the sale of their respective stakes, although they are also considering a flotation on the Warsaw bourse.

Private equity firms are viewed as the most likely buyers OF Polkomtel, in a deal which would rank as the largest European leveraged buyout (LBO) of a telecom company since 2005.

That was the year when five private equity firms acquired Danish telecom firm TDC (TDC.CO: ) and Egyptian billionaire Naguib Sawiris bought Italy’s Wind for upwards of $10 billion.

TDC’s private equity owners are considering a share sale, while Sawiris is battling to sell Wind and some African assets to Russia’s Vimpelcom (VIP.N: ) for a smaller amount of $6.6 billion.

Improving financing markets mean debt is available for increasingly large private-equity backed deals, with bankers noticing a rise in the number of conversations that could lead to multi-billion euro buyouts next year.

COMPLICATED SCENARIO

Prospective bidders for Polkomtel may receive information packs in a few weeks, several people familiar with the matter said.

But the sale process may not be smooth.

“You have four large shareholders, each with their own agenda, which means things could get very messy indeed,” said one banker who advises telecom companies.

“Now there is some clarity over Vodafone’s role, things may get moving,” the banker added.

But another person cautioned that the deal, which has been anticipated for a long time, could still hit problems owing to the complex nature of the situation and the number of parties involved.

Nor is Vodafone, which is in the middle of divesting non-core assets, likely to sell unless it feels the price is right, this person added.

Polkomtel’s chief executive told Reuters in September Apax Partners and Blackstone were interested in bidding for a controlling stake in the company. Banking sources have also tipped TPG, CVC, EQT and KKR as interested parties, although no trade buyers have been linked to the process so far.

All of the private equity firms either declined or could not be reached for comment.

Blackstone and TPG have considered working together on a joint bid, one person said, due to the size of any transaction.

(Additional reporting by Kate Holton and Simon Meads; Editing by David Holmes)

($1=.7193 Euro)

DealTalk: Vodafone may sell in 4 billion euro Polkomtel deal