The Serbian government has rejected a new offer from Telekom Austria for 51 percent in the national operator Telekom Srbija. Telekom Austria offered the government EUR 1.1 billion, including payment of EUR 800 million immediately and additional payments over the next nine years. The Austrian operator earlier bid EUR 800-950 million plus EUR 450 million in capital investments over three years. As this was below the minimum price of EUR 1.4 billion set by the Serbian government, the company was told to go back and rethink its offer. Telekom Austria said its original bid assumed approval for the merger of its existing Serbian mobile operator Vip with Telekom Srbija's mobile unit, the market leader Mts. Since then, negotiations with the Serbian Ministry of Finance identified "additional value-enhancing elements". These include spectrum agreements and licence extensions, the company said without being more specific. The new bid values Telekom Srbija's equity at up to EUR 1.1 billion, with an enterprise value within the previous target range of 4.8-5.3 times estimated adjusted EBITDA for 2012. The Serbian government's working group on the sale recommended the government reject the offer, as again it did not meet the financial criteria required.
