PPF Group Boosts Stake in O2 Czech in Share Buyback Offer

By Sean Carney

PRAGUE--PPF Group NV, the Czech financial group owned by billionaire Petr Kellner, Monday said it has acquired an additional 7.2% of outstanding shares in telecommunications company O2 Czech Republic AS (BAATELEC.PR) in its mandatory buyout offer for minority shares, lifting its stake to 73.1% and its voting rights to 74.4%.

The company's stake in O2 CR has not reached the 90% level required to launch an additional share buyback and so minority shareholders will still be able to buy and sell the stock on the Prague Stock Exchange.

However, PPF said in the buyback that ended June 30 it rejected offers equal to 8.9% of the company's total shares due to technical shortcomings.

"It will be interesting to see what the rejected investors will do next. We can imagine slight selling pressure," said Milan Vanicek, analyst at J&T Bank in Prague, who has a sell recommendation and target price of 305 koruna ($15.1) on the company's shares.

At 0824 GMT, O2 Czech Republic shares were trading down 0.8% on the day at CZK265.5.

In January, PPF Group bought its 65.9% stake in the company from Spain's Telefonica SA (TEF) for 2.06 billion euros ($2.82 billion) outright and for an additional EUR303 million over the following four years.

In May, PPF Group approved a 295.15 koruna ($14.72) offer for each outstanding share. However, that was below the then-market price for the stock and also below the CZK305.63-per-share purchase price that PPF paid for the company in January, and so minority shareholders didn't flock en masse to the buyout offer.

PPF Group carried out the buyout of minority shareholders through its Dutch-registered subsidiary PPF Arena 2 BV.

Write to Sean Carney at [e-mail]

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