* Share price hovering just below 7.15 euro offer
* No higher offers expected
* Writedown cast shadow over Telekom Austria prospects
By Angelika Gruber and Georgina Prodhan
VIENNA, July 10 America Movil's move
to boost its stake in Telekom Austria could be the
best chance shareholders will have to extract value from the
stock for some time, investors and analysts said ahead of
Thursday's offer deadline.
A surprise 400 million euro ($546 million) writedown on
Telekom Austria's Bulgarian business last month has cast a
shadow over the company's short-term prospects, enhancing the
merits of the 7.15 euro-per-share offer from the Mexican group
controlled by billionaire Carlos Slim.
America Movil is offering up to $2 billion for the 45
percent of Telekom Austria not already owned by the Mexican
company and the Austrian state, which have combined their stakes
in a shareholder pact.
Telekom Austria shares have hovered just below 7.15 euros
since Slim made his offer, which closes at 1500 GMT on Thursday,
and there appears to be little chance of a subsequent higher
offer to squeeze out minority shareholders in the medium term.
"Before the writedown, I said I, personally, would hold my
shares, because I saw prospects for the company in the medium to
long term. But now I'm thinking what to do," said Wilhelm
Rasinger, president of Austrian retail investor association IVA.
"Since a squeeze-out is neither foreseen nor possible, I
don't know where I could get a better price. I'm leaning towards
tendering," added Rasinger, emphasising that he was speaking
about his own intentions and not making a recommendation.
The offer, designed to cement the presence in Europe of
Slim's Latin American telecoms group, was launched in mid-May
and represented a 10.7 percent premium over the six-month
average share price.
America Movil owns about 27 percent of Telekom Austria -
which it effectively controls through the pact with the Austrian
government, which owns 28 percent - and has a medium-term target
of a stake of about 51 percent.
Take-up for the offer could also be boosted by Telekom
Austria's dividend policy. The company announced in February
that it will freeze its payout, which it cut to 5 cents per
share in 2012, for a third year running.
About 10 percent of Telekom Austria's shareholders are
retail investors, some of them Austrian citizens still holding
shares they bought at 9 euros in the company's initial
part-privatisation in 2000.
Guenther Schmitt, a Raiffeisen fund manager who holds
Telekom Austria shares, said he planned to sell his shares to
hedge funds in the market - thereby ensuring quick payment - and
that the funds would then tender the stock to benefit from the
slight premium in the offer.
Erste Group's chief analyst Guenther Artner is another to
have recommended the America Movil offer.
"I think the best strategy is to take up the offer," he
said, pointing out that investors may have an opportunity to buy
back in to the company in a capital increase expected by
A note from Jefferies analysts after the offer was launched
described the price as "reasonable", adding that "a meaningful
level of acceptances should be expected".
Results of the tender are expected early next week, though
Austrian takeover law requires that investors are given the
opportunity to sell at the same price in another three-month
window shortly after the initial offer process is concluded.
($1 = 0.7331 Euros)
(Editing by David Goodman)