A report in today's Financial Times suggests that two private equity bidders are vying to buy Bulgaria’s largest telecoms company (and former monopoly), Vivacom, which was put on sale in July.
United Group and Providence Equity Partners are said to have launched indicative bids (bids indicating interest) for the company of a little over €1 billion and to be conducting due diligence.
United Group describes itself as “the leading multi-play telecoms and media provider in South East Europe, providing customers with a full range of telecommunications services”. Its various brands already give it a presence in Slovenia, Bosnia and Herzegovina, Montenegro and Serbia. This year it completed a takeover of Tele2 in Croatia for €220 million. It is majority-owned by BC Partners, a leading global investment firm.
Spas Roussev, a London-based Bulgarian businessman, and the London arm of Russian bank VTB together took control of Vivacom in a 2015 auction after a debt default, paying about a third of the estimated bids from the two private equity groups. However, the sale was also said to include some €400 million in debt. Nevertheless this still could imply a healthy profit if the indicative bids for the Bulgarian giant are confirmed.
There is, however, a caveat. Another investment company, with a stake in the holding company that owned Vivacom in 2015, insists that the 2015 auction saw the company sold at an artificially low prices and is challenging the outcome of the auction in the UK and Luxembourg courts.