HT and Zagrebačka Banka Sold Optima Telekom to Telemach Hrvatska

Hrvatski Telekom and Zagrebačka banka signed an agreement with Telemach Hrvatska, owned by United Group, on sale and purchase of the shares of the OT-Optima Telekom company. The subject of the transaction is sale of total of 54.31% shares of OT out of which 36.90% are owned by Zagrebačka banka, while 17.41% are owned by HT holding, an HT-owned company.

The closing of the transaction is subject to the regulatory approvals and other agreed contractual conditions and is expected by the end of 2021. Sale and share purchase agreement determines the value for 100% shares of Optima Telekom on a debt free, cash free basis and amounts to HRK 639 million which represents 5 times 2020 EBITDA before one-time items after leases. Total expected proceeds for Croatian Telecom is yet to be determined based on predefined contractual parameters.

However the share price as agreed in the agreement will be lower than the three month volume weighted average from the regulated market that would be implemented by the buyer in the mandatory takeover bid (8 April and 8 July 2021). HT acquired its shareholding in OT by debt to equity swap within the pre-bankruptcy settlement procedure and acquired management rights based on the agreement with Zagrebačka banka, the largest OT shareholder.

In 2014, based on the Management Agreement signed between HT and Zagrebačka banka, the Croatian Competition Agency (AZTN) gave its conditional approval to the concentration of Croatian Telecom and Optima Telekom for a limited period of four years. In June 2017, the duration of the conditionally approved concentration was prolonged to HT until 10 July 2021. Irrespective of the closing of the transaction of the sale of the shares, the concentration of HT and OT ceases as of 10 July 2021.

The process of the sale of the shares started on 31 January 2020 by publication of a public invitation for submission of bids and subsequent selection of the investment bank Credit Suisse (Deutschland) Aktiengesellschaft with its headquarters in Frankfurt am Main, which was engaged jointly by Croatian Telecom and Zagrebačka banka to manage the sales process.