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At the beginning of this year there were just three bidders left from the original twelve who responded to last year's international call for expressions of interest: a private equity group - British-German consortium Bain Capital & Axos Capital (which has been joined by BT Global Services); and two telecommunications firms - Hungary's Magyar Telekom (a subsidiary of Deutsche Telekom) and Skipti of Iceland. Now, after being asked to sharpen their pencils, there only two.On 14th January, the head of the Electronic Communications Directorate at the Ministry of the Economy, Matjaž Janša, announced that the commission was assessing the final bids of the Icelandic operator, Skipti, and a consortium of private equity firms, Bain Capital & Axos Capital.

The final showdown

Although all three firms had submitted binding bids, Magyar Telekom decided to stick to its guns and effectively ruled itself out of the running. The remaining two were willing to make substantial improvements to their packages. According to Janša, both have "improved their bids price-wise and, at first glance, their terms as well." Skipti is offering cross-ownership, while the consortium is proposing a two-phase sale process.

Both are upbeat about their latest offers. Bain Capital said in a press release that it had submitted a "convincing offer", while Skipti labelled its as "optimal". Skipti has been considered a favourite from the very start of the procedure, as unofficial reports suggest the privatization commission is leaning towards cross-ownership.

Development, growth, expansion and integrity

The bidders are vying for a stake in a telecommunication group centred around Telekom Slovenije that generated operating revenues of EUR 587 m in the first nine months of last year, up 5% year-on-year, although its net profits were down slightly - 2% to EUR 75 m. Apart from the parent company, the group comprises wireless subsidiary Mobitel, system integrator Avtenta.si, directory publisher Teledat, network maintenance company GVO and search engine operator Interseek as well as a number of subsidiaries abroad, particularly in the the former Yugoslav republics.

As to the type of investor the telco will get, its group CEO Bojan Dremelj said in October last year that they wanted a partner who would support the group's further development, growth, expansion and integrity. "I think there are several companies among the potential bidders that most probably have exactly the same views," he said.

Twelve firms initially submitted offers following the release of the tender documents and Bain Capital & Axos Capital and Skipti have emerged from the final group of seven that were invited to submit binding bids, which also included: the Luxembourg-US fund CEP III/Carlyle, the Croatian telco Hrvatski Telekom (owned by Deutsche Telekom), Australia's Macquarie Bank, Hungary's Magyar Telekom (also owned by Deutsche Telekom) and Oger Telecom of the United Arab Emirates.