Polish Cyfrowy may pay $33 mln dividend to clinch Polkomtel buy
WARSAW Jan 25 (Reuters) - Poland's largest media group, Cyfrowy Polsat, may pay a dividend of 100 million zlotys ($33 million) in return for its minority shareholders' support for its takeover of the country's No.3 mobile operator Polkomtel, Cyfrowy said late on Friday.
Cyfrowy Polsat plans to take control of Polkomtel via a share issue worth 6.15 billion zlotys ($2.0 billion), but at the same time will need to take on Polkomtel's debt of some 10 billion zlotys.
In November, businessman Zygmunt Solorz-Zak moved to merge the two companies, both of which he controls and which are his most profitable concerns, to cut debt and create one of Poland's 10 largest listed companies with joint revenues of 10 billion zlotys and core profit of 3.9 billion.
But some minority shareholders, including local pension funds, questioned Polkomtel's valuation, and for more than a week delayed a Cyfrowy shareholder meeting called to approve a share issue to Polkomtel's parent company Metelem as part of the deal.
Solorz-Zak had hoped to win over minority shareholders by locking up his own Cyfrowy stake for a year and by signalling a possible dividend in 2015 rather than in 2016.
But the company has now opted to bring forward the dividend payout.
"In the opinion of the management board the payment of 100 million zlotys dividend or interim dividend will not pose a serious threat to the financial position of the company or to its plans," Cyfrowy said in a statement late on Friday.
"The decision (to pay out dividend) is a condition to conclude the acquisition of Metelem, which the management board sees as vital to Cyfrowy Polsat's growth," it added.
Cyfrowy, valued at 6.96 billion zlotys, has not paid out a dividend since 2011 when it bought broadcaster TV Polsat with debt, also from Solorz-Zak.
The Polkomtel buy is to raise the group's net debt to 3.1 times its core EBITDA profit, compared with 1.78 now. The group had originally wanted to delay any payout to shareholders until it brought the debt ratio down below 2.5. ($1 = 3.0723 Polish zlotys) (Reporting by Adrian Krajewski; Additional reporting by Pawel Bernat; Editing by Hugh Lawson)