Final Word from Tuesday, June 1, 2004

Euro wrote yesterday that the advisory tender for the Český Telecom privatization doesn't bode well for the transparency of the entire process. It listed the voting results of the tender commission and suggested that two members, Michal Frankl and František Hesoun of the IT ministry, intentionally underrated Merrill Lynch/Wood & Co. so that CSFB/ČS could win the deal (which it did). The IT ministry has supported a sale to a strategic investor, but there's growing pressure to sell to a financial investor (such as Euro's owner, PPF). There are rumors that there's a plan to package the existing managers into the privatization deal and to ask the future owner to give them substantial stock options if they successfully turn Telecom around. If true, Telecom's managers wouldn't have much incentive to rationalize the company prior to the privatization. Česká spořitelna Credit Suisse First Boston CS


Tel: 420 224 221 580

Published by

E.S. Best s.r.o.
Ovenecká 78/33
170 00 Prague 7
Czech Republic



FS Final Word