French group Orange, the mobile telephony arm of France Telecom, has started procedures to buy the remaining 32% stake in Orange Romania that it does not own yet, according to market sources. This may be one of the biggest transactions ever concluded on the Romanian market and may be worth 500 million dollars.
Orange officials have confirmed the beginning of talks, but Orange Romania CEO Bernard Moscheni could not provide further details by press time.
Orange Romania, which last year logged $527 million in revenues, was assessed at $1.5 billion by Moscheni himself, in late 2003.
The minority shareholders (investment funds and companies) are already bracing for the transaction and have retained investment bank Rotschild as financial advisor and Squire, Sanders & Dempsey (represented by Voicu & Filipescu SCA in Romania) for legal advice. Moreover, the investment funds comprising the financial consortium that holds 20.7% in Orange Romania are already transferring the shares, in view of the upcoming sale.
Negotiations over the price will practically start in about a month, with the transaction to be completed by mid-year, market sources say.
Orange holds about 68% in Orange Romania, with the rest distributed among several investment funds and companies that came to own Orange Romania stock following a series of capital increases aimed to fund the company's growth and that were operated between 1998-1999.
The main minority shareholder is a financial consortium comprising several investment funds, holding a 20.7% stake. The most prominent member of the consortium is AIG New Europe Fund, part of American giant AIG, which indirectly owns some ten percent in Orange Romania.
An 11.5% stake is in the possession of several Romanian and foreign companies, among which Radcom (owned by businessman Nicolae Badea), Alcatel (France) and Tomen (Japan).
Procedures and the soon-to-follow negotiations for the acquisition of the 32% stake have been prompted both by Orange and by the minority shareholders.
On the one hand, France Telecom and Orange have been enforcing (both in Romania and abroad) a strong acquisition policy, aiming to become sole shareholders of their profitable subsidiaries.
On the other hand, the investment funds that became Orange Romania stockholders in December 1999, are looking for exit ways, since the investment has matured. Private equity funds generally spend 4-5 years in a business.
The consortium led by AIG New Europe Fund has invested some 100-200 million dollars in Orange. As Orange Romania has been assessed at $1.5 billion, the consortium has actually tripled its investment (without considering dividends) in about four and a half years.
Orange started operating in Romania in 1997, under the name of Mobil Rom, having entered the market almost at the same time as its main competitor, Mobifon.
The company has invested more than 700 million dollars on the Romanian market, with the money supplied both by shareholders and by banks.
laurentiu.ispir@zf.ro
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
