Telecoms among targets in investor PPF's European expansion drive
08/11/2024 15:16
By Jan Lopatka and Michael Kahn
PRAGUE, Nov 8 (Reuters) - PPF Group, the investment
vehicle owned by central Europe's richest family, will seek more
acquisitions across its portfolio including potentially some
United Group assets in south-east Europe and other telecom
firms, its CEO Jiri Smejc told Reuters.
Billionaire investor Smejc took over managing PPF in 2022 on
behalf of the family of his long-time business partner Petr
Kellner after his death in a heli-skiing crash.
He has since led a shift away from Russia and Asia to
Western markets, taking stakes in German TV group ProsiebenSat.1
PSMGn.DE , parcel box firm InPost INPST.AS , streaming
services provider Viaplay VPLAYb.ST and other assets.
Smejc said in a rare interview that PPF, which has assets of
44 billion euros ($47 billion) and puts the Kellner family at
106th position in the Forbes global list of billionaires, would
look for growth in telecoms and other core areas, including
media, financial services, and e-commerce.
"We try to focus on the larger businesses we have, and
investments we are looking for are concentrated in these areas,"
he said, highlighting the importance of industrial know-how.
Although PPF took a hit from the COVID-19 pandemic, the war
in Ukraine and regulatory changes in China, it has restructured
its holdings and grown profits faster than expected, Smejc said.
UNITED GROUP
Smejc sold half of PPF's telecoms businesses in
central-eastern Europe plus one share to UAE's e& EAND.AD for
2.15 billion euros in a deal closed last month, creating the e&
PPF Telecom Group.
He said it is now looking at concrete acquisitions,
including potentially telecoms and pay-TV operator United Group.
Reuters reported in June that Saudi Arabia's STC Group
7010.SE was considering an offer for United Group, which is
majority owned by BC Partners.
A source with knowledge of the matter said United Group's
telecoms assets in south-eastern Europe have been put up for
potential sale.
"There are certainly several assets there that fit well into
the topology of our business in this part of Europe," Smejc said
of a possible deal.
"We have told ourselves we would look at it but at the
moment the situation seems a little bit unclear, which direction
it will go."
BC Partners did not respond to request for comment.
Smejc also said PPF and e& would be interested in some
European Vodafone VOD.L assets, but there were no talks
underway.
PROSIEBEN
Smejc said he was unhappy with pace of progress in reshaping
Germany's ProSiebenSat.1, where PPF is the second-largest
shareholder with a 15% stake.
Shareholders at ProSiebenSat.1 have pushed for the sale of
its e-commerce units. Smejc said he was not happy with the sale
pace and further changes at the company.
"To put it simply, we do not have the feeling that the
management is doing a good enough job," Smejc said of the way
that ProSiebenSat.1 was being run.
"When I compare it to our companies, the sense of urgency
that we feel when we try to turn a negative trend is completely
different than what we see from the management," he said.
Asked about possible pressure for management changes, Smejc
said that would mainly be up to ProSiebenSat.1's largest
shareholder MFE-MediaForEurope MFEB.MI .
"Either the management needs to accelerate the pace at
which, as if they owned the company, carries out the
restructuring, or the shareholders will have to react," he said,
adding the company had potential if managed well.
Smejc also denied recent Polish media reports saying PPF,
whose CME unit owns television groups in six central and east
European markets, may be interested in Warners Bros. Discovery's
WBD.O Polish unit TVN.
"We have so far not made any step whatsoever to look at this
asset, because we have other priorities at the moment," he said.
Smejc said he was happy with PPF's 28.75% holding in InPost,
whose shares have risen 80% since PPF's 2023 entry. He said PPF
was not considering a takeover offer.
He said PPF has also not shelved the idea of a tie-up of its
trains manufacturing unit with Spain's Talgo TLGO.MC , although
Talgo had earlier this year rejected PPF. An industrial tie-up
could work even if the firm has new shareholders, he said.
PPF STAKE
Smejc, whose net worth is estimated by Forbes at $1.17
billion, took over as PPF CEO for three years in June 2022.
His package includes options for a stake of up to 10% in PPF
if undisclosed benchmarks were met.
But, Smejc said for the first time, it was likely that there
would be a financial settlement instead.
"At the moment, we are talking more about the second option
... to settle financially. That is our mutual agreement," Smejc
said, adding that whether he stayed beyond three years was "an
open matter".
"I'm enjoying many things here, so if the terms make sense
for both sides, it is certainly something I can imagine."
($1 = 23.5130 Czech crowns)
($1 = 0.9292 euros)
(Reporting by Jan Lopatka; Editing by Alexander Smith)
((jan.lopatka@thomsonreuters.com; +420 234 721 614; Reuters
Messaging: jan.lopatka.thomsonreuters.com@reuters.net))