German state to reducestake in Deutsche Telekom

11th October 2004, Comments 0 comments

11 October 2004 , BONN - The German state announced plans Monday to reduce its stake in telecoms giant Deutsche Telekom by some 7 percent in a transaction which could generate revenue amounting to nearly EUR 4.5 billion. The announcement, coming only two days after Telekom sparked controversy by its plans to buy back its internet subsidiary T-Online from the market, said the German state-owned development bank KfW would offer 230 million Telekom shares at EUR 15.05-15.20. In addition, the KfW would issue s

11 October 2004

BONN - The German state announced plans Monday to reduce its stake in telecoms giant Deutsche Telekom by some 7 percent in a transaction which could generate revenue amounting to nearly EUR 4.5 billion.

The announcement, coming only two days after Telekom sparked controversy by its plans to buy back its internet subsidiary T-Online from the market, said the German state-owned development bank KfW would offer 230 million Telekom shares at EUR 15.05-15.20.

In addition, the KfW would issue some 70 million warrants, worth some EUR one billion  at the offer price, which could be converted into Deutsche Telekom shares.

At the moment, the German state holds 43 percent of Europe's largest telecoms concern. The government's direct stake is 26.05 percent, with the KfW holding 16.70 percent for the government.

After the transaction, which KfW said would be carried out quickly through institutional investors, the German state's share would be reduced by a further 7 percent, leaving 64 percent widely dispersed among investors.

The move by KfW comes while the German government is scrambling to shore up its finances amid rising spending deficits.

At the same time, the news came while markets and investors were still trying to absorb the shock waves of Telekom's announcement that it aims to reabsorb Internet provider T-Online.

The offer of EUR 8.99 per T-Online share is only about one-third the initial launching price of EUR 27 which Telekom received when it floated T-Online four years ago.

On the Frankfurt Stock Exchange, Telekom shares were down some 0.78 percent to EUR 15.11 about an hour into the new session, while T-Online shares had gained some 3 percent to over EUR 9.10.

DPA

Subject: German news
 

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