Czech carrier attracts bids

January 10, 2002 Posted: 1225 GMT

LONDON (CNN) -- Deutsche Telekom and France Telecom's mobile phone unit Orange are reportedly in the running to buy Czech-owned Cesky Telecom.

The two European phone operators are among five bidders who want to buy a majority stake in the government-run Cesky, which has a market value at $3.4 billion, according to news reports.

The Czech privatisation agency is set to announce the bidders later on Thursday for a 51-percent stake in Cesky, reports say. The winner is expected to be announced in March.

In addition to Deutsche Telekom and Orange, there is speculation other potential buyers will include a consortium made up of Warburg Pincus, Doughty Hanson and Apax Partners, and an alliance of CVC Capital Partners and Spectrum Equity Partners.

Deutsche Telekom has declined to comment on the report, while Orange's owner France Telecom said it was interested in buying Cesky's mobile unit, Eurotel, in a possible all-stock deal.

"France Telecom group is not interested in the fixed-line activities," a company spokesman told Reuters. "But through Orange, we are looking at the Eurotel mobiles business. That could make sense with France Telecom's mobile activities in the region."

Dutch carrier KPN Telecom and Swiss operator Swisscom already have a 27-percent combined stake in Cesky. Both companies have said they plan to sell their shares.

Cesky is the dominant Czech carrier. As well as owning Eurotel, the company has a network of nearly four million fixed phone lines.

Although Cesky is valued at $3.4 billion, Reuters said the stake could be worth closer to $1.5 billion because its shares have tumbled due to weak market conditions. However, Prime Minisater Milos Zemen has said the government will delay the sale if the offers are too low.