Peteris Smidre, the founder and top honcho at Baltkom, Latvia's largest cable TV company which also provides internet, fixed and mobile telephony, has said he and an international investor could participate in an auction of TeliaSonera's 49 % of Lattelecom, after which Baltkom and Lattelecom could merge to form a single group.
Smidre said such a merger would dilute the Latvian government's holding in the merged company to less than 51 %. It would also open up synergies in content distribution -- Baltkom has some 180 000 cable subscribers -- and give Lattelecom access to Baltkom's virtual mobile operator, which runs on the Bite network. With all frequencies allocated, Lattelecom has no chance to start its own GSM/UMTS operator should it leave the TeliaSonera sphere one way or another.
Smidre would not comment to this blogger on which investors he had contacted, but they are rumored to be Citigroup and The Blackstone Group.
The Latvian cable and telecoms entrepreneur (he started Baltcom GSM, then sold it to Tele2) didn't deny that one reason for his proposal was to offer an alternative to the nationalization of Lattelecom proposed by Minister of Transport Ainars Slesers.
Slesers wants TeliaSonera to swap its 49 % of Lattelecom for 23 % of mobile operator LMT held by the Latvian State Radio and Television Center (LSRTC). TeliaSonera would then buy any outstanding LMT shares held by the Latvian state for cash. Lattelecom would then be 100 % owned by the state and the state-owned LSRTC.
This is a plan that passes the Alfred E Newman test*, sorta. The possible insanity is in believing that the Latvian government will decide anything at its very appropriately scheduled April Fool's Day meeting.
* not insane