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Deutsche Telekom buys MIG’s shares in Greece’s OTE March 17, 2008

Posted by grhomeboy in Business & Economy, Telecoms.
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It was possibly meant to happen. Last week’s rumors, spread fast in business circles, while the old saying “where there is smoke, then there’s a fire” which suits well Deutsche Telekom’s case. The possible sale of MIG’s shares in Hellenic Telecommunications Organisation [OTE] could solve a major problem > If it buys, Deutsche Telekom may be the strategic partner the government was looking for.

According to various sources, MIG (Marfin Investment Group) has clinched a deal to sell all or part of its minority stake in OTE, about less than 20%, to German telecoms operator, Deutsche Telekom, at an unspecified price. The latter will be at a premium compared to the share price of OTE at Friday’s close on the Athens bourse.

OTE shares closed at 19.14 euro, up 3.35 percent on Friday, and Deutsche Telekom will most likely pay more than 24 per share to buy the stake. MIG’s average acquisition cost of OTE shares is estimated between 23 and 24 without including the cost of swaps the investment company has entered into with banks to buy the stake.

This deal is important for both MIG and the Greek government. The investment company, which will be able to raise more than 2 billion if it sells its entire stake, estimated at 19.6 percent, to the German telecoms operator. In addition, it will get some capital gains at a time bourses and credit markets are under pressure as evidenced by the Fed’s extraordinary decision to bail out Bear Stearns, the second largest underwriter in US mortgage bonds on Friday.

It is worth noting that Marvin Investment Group (MIG), an investment holding company whose biggest shareholder is Dubai Group, raised more than 5 billion last summer at more than 6 per share in the biggest IPO ever by a European company of its kind but has seen its share fall dramatically since then. It gained 8.04 percent to 4.30 on Friday on speculation about the deal with Deutsche Telekom.

The likely sale of OTE shares to Deutsche Telekom by MIG is even more important for the government, although it comes at a difficult time. The government has repeatedly said it would prefer a major Western European telecoms organization to become OTE’s strategic partner and has discouraged financial investors such as Private Equity Funds from attempting to gain control of the organization.

Deutsche Telekom (DT) was among the European operators that expressed interest in OTE in the second half of 2006 but the change of CEO at the time and DT’s other priorities at home seemed to have played a role in putting the project on hold.

It is known that the government had appointed three advisers, namely Credit Suisse, UBS and Eurobank EFG, to find a strategic investor for OTE in the last quarter of 2006 and 2007 but their efforts did not bear fruit.

It is ironic that the same company, that is MIG, which defied the government’s repeated warnings to raise its stake in OTE, is becoming the catalyst for finding a strategic partner for the country’s telecoms incumbent. The government in December last year passed legislation prohibiting investors from acquiring more than 20 percent in companies of strategic importance to the country without its approval.

By all accounts, this is a protectionist piece of legislation and the government would have had a difficult time defending it before the European Court of Justice, where it would most likely have ended up.

So, the MIG-Deutsche Telekom deal will save the government face because it will not have to go to court. Even if the case is taken to the European Court, it will have no problem doing away with the law since DT will – de facto – have become OTE’s foreign strategic partner.

The government will also be able to sell a deal with Deutsche Telekom to the international investment community as a sign that its privatization program is still on track. This may not be appreciated so much at a time when international stock markets are suffering but will be later on.

It should be noted though that how this deal will be structured is another story and will not happen tomorrow. After all, Deutsche Telekom will have to justify the deal to its shareholders. The latter must be fully aware of the Greek government’s restrictive law with regard to the shareholding of domestic corporations of strategic importance, so they will ask for clarification on that particular point.

After all, it is not popular with shareholders nowadays when their companies spend billions of euros to buy minority stakes in other companies, even if they are regarded as good assets, such as OTE mainly on account of its operations in Southeastern Europe, without having secured a road map to full control down the road. In turn, this means the government must have been informed of the deliberations between MIG and Deutsche Telekom and must have given its blessing even if it does not advertise it or even denies it in public.

It is very likely DT will ask the Greek government at some point to buy part of its 28.7 percent stake in OTE and the latter will consent to it along with the signing of a shareholders agreement. DT may even proceed with a public offering to buy the remaining OTE shares from the market and enhance its equity stake in the Greek telecoms organization.

Aside from what DT will or will not do in coming weeks and months, it is safe to say Deutsche Telekom is most likely OTE’s foreign strategic partner and this cannot escape the attention of trade unions and opposition political parties. So, the government will likely face stiffer resistance and will have to prepare for that.

Greece’s Intralot upbeat on winning Spor Toto March 15, 2008

Posted by grhomeboy in Business & Economy, Games & Gadgets.
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Greece’s Intralot SA, the world’s second-largest gaming-services provider, is “optimistic” about winning a 10-year contract to run Turkish sports-betting game Iddaa, Chief Executive Officer Constantinos Antonopoulos said.

Inteltek, the Turkish unit of Athens-based Intralot, in February signed a one-year interim contract to operate Iddaa for Spor Toto, Turkey’s state gaming authority. Inteltek, a venture between Intralot and Turkcell Iletisim Hizmetleri AS, said it controls about 40 percent of the country’s gaming market.

“We are very optimistic,” Antonopoulos said in an interview in London yesterday. “In the 15 years we have been in this business, we’ve never lost a client. And we don’t want to lose it,” he said. Intralot will also bid for Turkey’s state-owned national lottery, he added.

Intralot has a market value of 1.77 billion. The gaming company, which is scheduled to announce full-year results by the end of this month, forecast 2007 profit of 115 million euros on sales of about 880 million. Profit in the first nine months rose 4.2 percent to 85.5 million, Intralot said November 21.

The results “will be in line with our forecasts,” the executive said, adding that the final dividend will be similar to last year, when Intralot paid 18 cents a share.

Since the beginning of the year, Intralot has won new gaming contracts in South Carolina, its fifth US contract, and Poland and Turkey. It hopes to expand in China and begin operating in Vietnam, Antonopoulos said.

Intralot employs more than 4,000 people and runs lotteries and supplies gaming technology to 40 countries. Intralot’s revenue trails Lottomatica SpA, which manages Italy’s national lottery.

A new stake partner in Greece’s Lampsa Hotel Company March 14, 2008

Posted by grhomeboy in Business & Economy, Hotels Greece.
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Venture Ability has gained majority control of the Lampsa Hotel Company, the owner of Athens’s historic Grande Bretagne Hotel in Syntagma Square, after a public offer that ended March 11.

14-03-08_grande_bretagne.jpg  The Grande Bretagne

Venture, acting with Homeric Department Stores in the offer, bought 3.45 million Lampsa shares for 17.18 euros each, according to a statement late Wednesday to the Athens bourse. Together, Venture and Homeric now own 65.8 percent of Lampsa. Prior to the offer, they held 49.5 percent.

The offer valued Lampsa Hotels at 367 million euros, or about 3.4 percent more than the market value of the company the day the offer was announced on January 16. Lampsa, which has said it is seeking to expand into cities such as Istanbul, Sofia and Bucharest, also has a controlling stake in Belgrade’s Hyatt Regency Hotel.

Greece’s EFG Bank in Mideast venture March 14, 2008

Posted by grhomeboy in Business & Economy.
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EFG International, the Swiss private bank founded by the late Greek shipping tycoon John Latsis, said it has started a joint venture with Beirut-based Lebanese Canadian Bank to improve access to clients in the Middle East.

Zurich-based EFG will own 51 percent of the venture, called LCB Capital Management Ltd, which will operate from London and is effective immediately. Lebanese Canadian Bank had assets under management of $3 billion at the end of 2007, EFG said.

Greece’s OPAP to defend its monopoly on local gaming March 13, 2008

Posted by grhomeboy in Business & Economy, Games & Gadgets.
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The reorganization of procedures, the agreement with betting agents and the rationalization of the “Pame Stoichima” [Let’s go Betting] betting game are the three top priorities for Christos Hadziemmanouil, the President and Chief Executive Officer of Greek gaming company OPAP.

Speaking to Dow Jones, he said the above three pillars concern the moves of the OPAP administration over the next few months and the aim is for those issues to have closed by June.

Plans for expansion abroad announced by the previous management of the company remain on ice and will be reviewed by the end of the year, said Hadziemmanouil. By that time the move by the European Commission against the company’s monopoly will have unfolded, he added, noting that he will defend the monopoly with all his strength.

“However, if worst comes to worst and we lose the monopoly, then only some very gullible people will believe that OPAP would cease to be profit-making,” he told the international news agency.

On “Pame Stoichima”, the OPAP head said that the undertaking of its management by the company was a huge step. OPAP will introduce new forms and new fields of betting in order to strengthen it, although these moves will not be made before the existing betting fields are rationalized.

Hadziemmanouil also remarked that a crucial change in the company’s operation will be the basis of a new relationship it wants to have with its agents. OPAP has begun negotiations with the agents’ federation for the signing of a new agreement between the two sides, and talks have been progressing rapidly.

Related Links > http://www.opap.gr  and http://www.pamestihima.gr

Privatization of Greek ports bill gets go-ahead March 13, 2008

Posted by grhomeboy in Business & Economy.
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The bill conceding the service sectors of the Piraeus and Thessaloniki ports to private investors was passed last night, in principle, in Parliament.

The government has shown therefore that it is determined to proceed with the major reform of ports that will boost their essential infrastructure and render them more competitive, using contracts that had been signed in 2002 and 2003 for the first time and conceding the management of ports to the Piraeus and Thessaloniki Port Authorities [OLP and OLTH, respectively].

The upgrade of their infrastructure via the agreement of private investors to undertake their service sectors is estimated to bring in up to 450 million euros.

Greece’s Folli-Follie rising profits March 13, 2008

Posted by grhomeboy in Business & Economy, Fashion & Style, Shopping.
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Jewelry and accessories retailer Folli-Follie said yesterday profits rose 12 percent in 2007 after it gained control of Elmec Sport in October.

Net income increased to 72.7 million euros from 65.2 million in 2006, on sales growth of 46 percent to 706.2 million euros. Japan and other Asian nations accounted for 62 percent of total sales last year.

Folli-Follie owns Greek airport retailer Hellenic Duty Free Shops, which said separately net income reached 33.5 million euros last year as sales advanced 38 percent to 414 million. Elmec Sport, which is 94 percent-owned by Hellenic Duty Free, had net income of 14.2 million euros last year, according to the statement.

Related Links > http://www.follifollie.gr/gr/Home_new.htm