Telenor has agreed to sell its mobile operators in Hungary, Bulgaria, Montenegro and Serbia to Czech investment group PPF for EUR 2.8 billion. PPF already owns the Czech operator O2 and is buying Bulgarian TV group Nova from MTG.
Telenor announced in January plans to sell the eastern Europe activities in order to concentrate more on its more promising markets in the Nordic region and Asia. The operations contributed around NOK 11.8 billion or 9 percent of Telenor's revenues and NOK 4.1 billion or 8 percent of EBITDA in 2017, and have more than 9 million customers and around 3,500 employees.
Telenor expects to record a book gain of NOK 3 billion from the sale, and the proceeds will go to a special dividend of NOK 4.40 per share for Telenor shareholders. Including the ordinary dividend of NOK 8.10 per share for 2017, the total pay-out in 2018 will be NOK 19 billion.
PPF Group claims to be the largest private investment group in CEE, with EUR 35 billion of assets under control. In addition to telecoms, the company invests in sectors such as banking, consumer finance, real estate and mining. Ladislav Bartonícek, PPF Group’s shareholder responsible for telecommunications assets, said the purchase "fulfills our long-held goal to become a mid-sized European operator and to use our experience to strengthen our market position".
The transaction price gives the Telenor activities an enterprise value of 6.4x EBITDA in 2017. The parties have agreed on deferred payment of EUR 400 million per year over four years. Completion of the deal still requires regulatory approval, expected by Q3.
