One of the pitfalls of speedblogging is errors. They stand corrected, including the headline.
Lattelecom's management and staff are offering TeliaSonera (the half-mother) and the government a total of LVL 290 million (around USD 580 million) for all of the fixed line operator, my one-time rival Baiba Rulle reports in Diena, the national daily.
The sum is around LVL 40 million above valuations for the company and apparently doesn't include the 23 % of Latvian Mobile Telephone (LMT) held by Lattelecom. A new legal entity will be formed to hold the Lattelecom participation on behalf of the management and staff with the whole deal financed by "international banks". Including the LMT holding, the amount paid for Lattelecom would be around LVL 450 million or USD 900 million, with around LVL 160 million to be recovered by selling 23 % of LMT to TeliaSonera.
To firm up the tentative committment to the buy-out by financial institutions, Lattelecom needs the government's go-ahead for the management/staff buyout. This would allow the financiers of the deal to do a complete due diligence on the company, Lattelecom CEO Nils Melngailis told this blogger recently.
The news comes shortly after Lattelecom top executives apparently got the go-ahead for the buy-out from TeliaSonera, who sees this as a way out of its endless halfmotherhood. A proposal to swap the 49 % Lattelecom holding plus cash for the remaining part of LMT has been on the table for nearly a year with no clear response by the Latvian government.
For Lattelecom, some deal, any deal is necessary to set a medium and long-term direction for the company. While Lattelecom has chafed somewhat having to deal with the half-mother, falling 100 % into state ownership is seen as the worst possible outcome.