PPF Offers to Buy Out Small Retail Shareholders in O2 Czech

By Leos Rousek

PRAGUE--Czech investment firm PPF Group Wednesday offered to buy a limited number of shares held by retail investors in telecommunications company O2 Czech Republic AS (BAATELEC.PR) at a 25% premium to the stock's current market value.

PPF, which is controlled by Czech billionaire Petr Kellner, already owns 83.15% of O2 Czech through its units PPF Arena 2 BV and PPF Arena A3 BV. It said it will buy up to 200 shares from each investor at 277.15 koruna ($12.6) per share.

The transaction isn't a public buyout offer and therefore it is limited to up to 1% of O2 Czech's outstanding shares, held by "roughly 40,000 small shareholders," PPF spokesman Radek Stavel said.

The company didn't say whether it would make an additional offer for the remaining minority O2 Czech shareholders.

PPF has sought to transform the former Czech telecommunications monopoly since it bought its initial 65.9% stake in the company from Telefonica SA (TEF) of Spain for 2.06 billion euros ($2.57 billion) in January. PPF has also agreed to pay an additional EUR303 million to Telefonica through 2018.

O2 Czech's share price has dropped 28% since the takeover by PPF. The shares were also hit last month when PPF said it was considering to take a loan of up to CZK24.8 billion from O2 Czech, stoking concerns over the company's future dividends.

Midday Wednesday, O2 Czech shares traded at CZK221.5, up 4.7% from its Tuesday's close, outperforming overall market gains.

Write to Leos Rousek at [e-mail], @LeoRousek

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