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AIG Acquires Bulgaria's Telco BTC in EUR 1.08 B Deal
Business | May 3, 2007, Thursday // 00:00
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Icelandic tycoon Thor Bjorgolfsson sold his 65 % option in BTC to an investment arm of insurance giant AIG in a EUR 1.08 B deal. File photo by Yuliana Nikolova (Sofia Photo Agency)
AIG Global Investment Group has acquired a majority stake in Bulgaria's dominant telecom firm BTC, the company announced on Thursday.
The investment arm of the insurance giant has sealed a contract with Novator, Icelandic tycoon Thor Bjorgolfsson's investment vehicle, and Viva Ventures for the acquisition of its 65 % option in BTC.
The sale price is set at EUR 1.08 B, bringing the total value of BTC to EUR 1.66 B, the company said in a statement to the Bulgarian Stock Exchange. It includes the recently proposed dividend of BGN 0.55 (EUR 0.28) per share.
AIG Global Investment Group is expected to acquire another 25 % in BTC as part of the deal.
The transaction is believed to be the largest private merger and acquisition transaction in Bulgaria to date.
The agreement will become officially a fact on June 11 when the three-year ban on BTC resale expires.
AIG joined the auction for Bulgaria's BTC as it entered its final days. The insurance giant defeated in the last moment Dubai-based Oger Telecom, Turkey's largest mobile operator Turkcell, US private equity fund Mid Europa Partners and a consortium of US private equity firms Texas Pacific Group and Warburg Pincus for the deal.
"The acquisition of BTC fits well into our strategy of investments in this growing region and builds on our extensive previous experience in Bulgaria and the telecom sector," said Pierre Mellinger, who has overall responsibility for AIG Capital Partners' private equity activity in Central and Eastern Europe.
Thor Bjorgolfsson, founder of Novator, commented: "We are pleased to be realizing our investment in BTC with which we have been involved since 2003. We have been investors in Bulgarian businesses since 1999 and we intend to continue to invest in Bulgaria with the country's EU accession further improving the investment environment."
At the beginning of 2006, right after the privatisation of Bulgaria's main telecom operator, Thor Bjorgolfsson acquired an option to buy a 100 % stake in Vienna-based Viva Ventures, which owns 65% in BTC. Viva Ventures paid EUR 230 M in the summer of 2004. Later on the businessman bought another 25% stake with compensation instruments, raising his stake in BTC to 90%.
BTC, which is the main telecom operator in Bulgaria employing approximately 20,000 professionals, has 2.9 million phone installed connections.
The telecom forecast a 16% fall in its net profit to BGN 111.6 M in 2007 due to increased competition and dropping prices.
Bulgaria has one of the highest fixed-line telephone penetration rate in Central and Eastern Europe - approximately 85% of all households have a telephone.
The investment arm of the insurance giant has sealed a contract with Novator, Icelandic tycoon Thor Bjorgolfsson's investment vehicle, and Viva Ventures for the acquisition of its 65 % option in BTC.
The sale price is set at EUR 1.08 B, bringing the total value of BTC to EUR 1.66 B, the company said in a statement to the Bulgarian Stock Exchange. It includes the recently proposed dividend of BGN 0.55 (EUR 0.28) per share.
AIG Global Investment Group is expected to acquire another 25 % in BTC as part of the deal.
The transaction is believed to be the largest private merger and acquisition transaction in Bulgaria to date.
The agreement will become officially a fact on June 11 when the three-year ban on BTC resale expires.
AIG joined the auction for Bulgaria's BTC as it entered its final days. The insurance giant defeated in the last moment Dubai-based Oger Telecom, Turkey's largest mobile operator Turkcell, US private equity fund Mid Europa Partners and a consortium of US private equity firms Texas Pacific Group and Warburg Pincus for the deal.
"The acquisition of BTC fits well into our strategy of investments in this growing region and builds on our extensive previous experience in Bulgaria and the telecom sector," said Pierre Mellinger, who has overall responsibility for AIG Capital Partners' private equity activity in Central and Eastern Europe.
Thor Bjorgolfsson, founder of Novator, commented: "We are pleased to be realizing our investment in BTC with which we have been involved since 2003. We have been investors in Bulgarian businesses since 1999 and we intend to continue to invest in Bulgaria with the country's EU accession further improving the investment environment."
At the beginning of 2006, right after the privatisation of Bulgaria's main telecom operator, Thor Bjorgolfsson acquired an option to buy a 100 % stake in Vienna-based Viva Ventures, which owns 65% in BTC. Viva Ventures paid EUR 230 M in the summer of 2004. Later on the businessman bought another 25% stake with compensation instruments, raising his stake in BTC to 90%.
BTC, which is the main telecom operator in Bulgaria employing approximately 20,000 professionals, has 2.9 million phone installed connections.
The telecom forecast a 16% fall in its net profit to BGN 111.6 M in 2007 due to increased competition and dropping prices.
Bulgaria has one of the highest fixed-line telephone penetration rate in Central and Eastern Europe - approximately 85% of all households have a telephone.
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