The TIM Hellas transaction marks another phase in Sawiris’s ever-growing telecommunications group, which hopes to gain a 100% stake in another Greek company, Tellas, and enter new Asian markets, such as North Korea, later this year.
Weather Investments now owns 100% of TIM Hellas after buying out private equity firms Texas Pacific Group and Apax Partners for €500 million. A statement from Weather said that the deal would be financed with debt provided by Citi, Banca IMI and Deutsche Bank. The deal, which was completed on February 6 subject to EC approval, will involve Weather taking on TIM Hellas’s net debt, which is about €2.9 billion.
Although Weather paid a hefty price for TIM Hellas, analysts are generally positive. “Sawiris paid €3.4 billion, the next highest bid was rumoured to be about €3.2 billion,” says Melvyn Cooke, telecommunications analyst at Standard & Poor’s. “[However], he is a savvy investor and can obviously see growth potential in TIM Hellas, probably through generating synergies with other companies in his portfolio.”
Value driven
Wael Ziada, an analyst at EFG-Hermes, says: “Sawiris is an efficient and aggressive player, at the same time as being ver
Sawiris announced his business philosophy at a 3GSM conference in Barcelona last month. “I am very interested in the money. Wherever I smell money I go,” he said.
The purchase of TIM Hellas means that another Greek provider, Q-telecom, which TIM Hellas brought in January 2006 for €360 million, joins Weather Investments’ portfolio, which includes Italy’s third-largest mobile operator, Wind Telecom. Wind was brought for $15.1 billion in 2006 from Enel. This purchase led to Weather gaining Wind’s 50% plus one share stake in Tellas, the Greek fixed-line and internet carrier. Since buying TIM Hellas, the third-biggest mobile operator in Greece, Sawiris has turned his attention to Tellas.
Sawiris aims to merge TIM Hellas and Tellas operations before 2008 and is interested in acquiring the 50% share of Tellas that the consortium does not already own, if it comes up for sale in 2007. The Greek utility Public Power Corporation controls the remaining Tellas stake.
The group also has interests beyond Europe via Orascom Telecom, the leading Egyptian telecom provider, in which Weather has a 50% stake.
Orascom, for example, is a minority shareholder in the company that is selling the UK’s Vodafone a controlling stake in India’s Hutchison Essar.
