PPF Telco Group, which is the main shareholder of O2 Czech Republic with more than 90 percent, received the CNB’s approval to crowd out minority shareholders. The redemption price of their shares will be 270 crowns per share. The buyout through PPF banka should be completed by the middle of next year. PPF stated this in a press release.
PPF Group plans to fully control O2 and integrate it into its telecommunications division PPF Telecom Group. This division includes mobile operators operating under the Telenor brand in Hungary, Bulgaria and Serbia, as well as the infrastructure companies CETIN Group, which operate in the same countries and in the Czech Republic.
“The goal of the inclusion of the O2 CR operator is to consolidate or strengthen the position of PPF Telecom Group in the field of telecommunications services and infrastructure in Central and Southeastern Europe,” said PPF spokesman Leoš Rousek. Since the change, the Group promises to improve customer service and simplify the management of its telecommunications division. O2 Czech Republic and its subsidiary O2 Slovakia will continue to operate in the Czech Republic and Slovakia under the O2 brand.
According to Cyrrus’s portfolio manager Tomáš Pfeiler, the repurchase price meets all legal requirements, so from a purely legal point of view it can be described as adequate.
“On the other hand, a number of small investors and funds have held the title in their portfolios for a long time due to stable dividends. These investors would like to continue. In order for PPF to compensate them for the forced sale, it would be fair to offer a higher price,” said Pfeiler.
According to Pfeiler, the departure of O2 is also a blow to the reputation of the Prague Stock Exchange, from which more titles are being downloaded this year. “The domestic stock exchange floor makes this less attractive in the eyes of issuers or foreign investors,” he warned.
Following the announcement, the shares strengthened by more than two percent during the morning to 270 crowns, ie the approved redemption price. However, they subsequently backed down and are around 268 crowns. “It can be expected that the price will be slightly below the approved redemption price until the transaction is completed. The shares are trading at the highest prices since June, when an accelerated share repurchase took place at a price of 264 crowns, thanks to which PPF in O2 increased more than 90 percent, “said WOOD & Company broker Vladimir Vavra.
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