Maltese-registered company to sue over lost bid for stake in Hungarian telecoms operator

A Maltese-registered investment banking company intends suing Hungary’s state owned commercial bank over the sale of its share in fixed-line telecom operator HTCC Rt, the Hungarian press reported this week.
The Malta registered company is M+A Capital Ltd and it plans to sue Postabank, which sold the shares at a lower price than M+A would have offered.
According to the report, M+A Capital claims it could have offered up to USD36million for the 20 per cent stake in HTCC, but the sale went to a consortium including Deutsche Bank AG, which paid only USD30 million.
The Malta company argued the sale failed to bring the Hungarian state the maximum revenue possible, and amounts to a betrayal of private agreements between M+A Capital and Postabank.
German Peter Klenner, a long-time visitor to Malta, and the man behind M+A Capital, believes Postabank behaved unacceptably by negotiating with M+A Capital to find a higher bidder and then selling the stake for a much lower price without considering M+A’s bid.
The German contends that if Postabank wanted to sell for a cheaper price it could have communicated with M+A and a deal might have been reached as early as last April.
A spokesperson for Postabank, however, is quoted as saying the bank made the best choice of buyer for the HTCC stake.
Postabank spokesman Attila Ószabó, said: "There were some other opportunities beyond that offered by the winning consortium, but those were either related to only a portion of the assets intended for sale, or were not adequately supported in financial terms," he said. "Postabank’s board of directors examined all opportunities and decided to go for the most favourable offer, considering all possible aspects."
But George Gondon, an associate of M+A Capital, held that M+A Capital’s proposal was backed by solid finances and was ready to be executed.
The agreement with Deutsche Bank and its partners was announced in a joint statement
1 October, and Postabank and HTCC noted that except for Deutsche Bank none of the other bidders has any other investment in Hungarian communications.
According to the report in the BBJ, Klenner himself founded HTCC in 1992, and served as its CEO until 1995, and remains a minority shareholder.
The report indicates that an agreement was reached between M+A and Postabank in January 2003, when Postabank agreed to sell to the Maltese company.
Later, however, M+A informed Postabank that it would be acting as an agent for a prominent US bank and that was accepted by Postabank.
On July 21, however, Postabank informed M+A that the price of USD36.86 million was insufficient due to the improved telecom outlook.
More recently, it was reported, Postabank informed M+A that another potential buyer had been found and had been given exclusivity until mid-September.
Klenner was not impressed: "This is a huge difference from what we brought to the table.
"We sent a letter on September 16, 2003, whereby we offered to initiate the purchase of the total package for USD36.9 million, less our commission of 3.5 percent. But we received no confirmation of acceptance."
While the share capital of M+A Capital is USD750,000, The Malta Financial and Business Times is informed that Klenner has several other business interests.
According to the registrar of companies, M+A Capital has a one hundred percent Maltese shareholding and directors.
HTCC operates almost 197,000 lines, serving over 668,000 customers in five of Hungary’s 54 telecom operating areas. It is registered in the US and listed on the American Stock Exchange (Amex). Owners of stakes in HTCC also include Tele Denmark, with 31.9 percent, and individuals with 19.1 percent. Its stock closed trading at USD10.10 Thursday.