Polkomtel Shareholders Said to Continue Talks With Four Bidders

May 25, 2011, 11:26 AM EDT By Maciej Martewicz and Pawel Kozlowski

May 25 (Bloomberg) -- The owners of Polkomtel SA, Poland’s second-largest mobile phone company, remains in talks with four bidders, a person close to the talks said, after a newspaper reported this week that the competition had narrowed to two.

The bids give Polkomtel an enterprise value of 16 billion zloty ($5.7 billion) to 18 billion zloty, said the person, asking not to be identified because the negotiations are private. Polish billionaire Zygmunt Solorz-Zak, Apax Partners LLP, Sweden’s biggest phone company TeliaSonera AB and a group formed by Telenor ASA and Bain Capital LLC are bidding, people familiar with the matter said earlier this month.

Polkomtel’s owners, which include Vodafone Group Plc, PKN Orlen SA, KGHM Polska Miedz SA, PGE SA, and Weglokoks SA, are considering bids only from TeliaSonera and Solorz, Rp.pl reported on its website May 22. The next round of bids are due June 10, another person with knowledge of the sale told Bloomberg today.

The owners plan to complete the transaction by the end of next month. The 2008 sale by Denmark’s TDC A/S of a 20 percent holding provides a 3.7 billion-euro ($5.2 billion) minimum valuation, KGHM said in November.

Deutsche Bank AG, which is advising one of the bidders, said in March that the price for Polkomtel won’t be “materially” higher than the one achieved in the TDC deal.

Enterprise Value

Polkomtel’s enterprise value includes about 2 billion zloty of net debt, a 1.03 billion-zloty dividend to due to current shareholders and a 130.7 million-zloty fine imposed by Polish antitrust regulators, the person close to the talks said today.

Polkomtel, which last year had earnings before interest, taxes, depreciation, and amortization of 2.83 billion zloty, said in April that this year’s earnings will be similar to 2010. The lower range of the bids gives and enterprise value of 5.65 times that level.

That compares with Turkcell Iletisim Hizmetleri AS’s 5.74 times 2011 Ebitda, and a 4.7 times multiple at Telekomunikacja Polska SA, Poland’s largest phone company, which also owns a fixed line business, according to Bloomberg data.

Polkomtel, operator of the Plus brand, has more than 14 million customers for voice and third-generation wireless services. It competes with Polska Telefonia Cyfrowa, owned by Deutsche Telekom AG, and France Telecom SA’s Orange.

--Editors: Nathaniel Espino, Kenneth Wong.

To contact the reporters on this story: Maciej Martewicz in Warsaw at mmartewicz@bloomberg.net; Pawel Kozlowski in Warsaw pkozlowski@bloomberg.net

To contact the editors responsible for this story: James Gomez at jagomez@bloomberg.net Gavin Serkin at gserkin@bloomberg.net

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