The mergers and acquisitions (M&A) market in Bulgaria shows the first signs of recovery, driven by the sale of the first national private television bTV and the acquisition of cable operators Megalan Network and Spectrum Net by mobile operator Mobiltel, according to market research company Mergermarket.

The recovery is attributed also to the purchase of 38% in the Bulgarian animal health company Huvepharma by Citi Venture Capital International (CVCI) and the acquisition of Bulgarian coffee shop chain Onda Coffee by Torino-headquartered Lavazza Coffee Shops Srl (LCS) in a EUR 6 M deal, says a Mergermarket report, covering the first nine months of the year, as cited by local Dnevnik daily.

The analysts from the market research company say some of the most interesting deals on this market are yet to come, including the expected change in ownership of Bulgaria's top fixed-line operator Vivacom.

Representatives of Dubai-based Oger Telecom have confirmed for local Dnevnik daily that the company is a side in the lock-up agreement that the major lenders signed on the restructuring options for the debt-laden company with the mezzanine creditors, the most junior lenders in the capital structure.

Under the agreement the mezzanine subordinated non-performing loans, which total EUR 400 M, will be transformed into equity capital of a Dutch-based company, which will be a majority owner in BTC.

Oger Telecom and to a smaller extent the other new owners are expected to invest another EUR 125 M for capital expenditures and payment of debts to the banks.

In exchange the telecom will become a minority shareholder and will keep its role in the management of the company.

Oger Telecom is expected to enter Vivacom as a strategic investor and bring about structural changes within three to four months.

The sale of Bulgaria's first national private television bTV was the fifth biggest deal among mergers and acquisitions in Eastern Europe for the first quarter of the year, shows data of the market research company Mergermarket.

Central European Media Enterprises signed a deal for the acquisition of the national private television bTV, wholly owned by Rupert Murdoch's News Corp, in the middle of February and completed it at the end of April.

CME paid USD 400 M in cash for 100% of the terrestrial free-to-air TV channel, bTV. The deal also included two genre channels, bTV Comedy and bTV Cinema, along with News Corporation's 74-per-cent interest in Radio Company C.J which operates five radio stations.

The leading Bulgarian operator Mobiltel signed in the middle of September pre-arrangements for the acquisition of two Bulgarian cable operators, Megalan Network and Spectrum Net.

The price of the merger was about EUR 70 M. M-Tel, which is part of Telecom Austria Group, acquired 100% of the two Internet providers. However, both companies will continue to work independently for a period of about 18 months.