The Croatian Competition Agency (CCA) adopted a decision on the basis of which Hrvatski telekom (HT) is committed to start selling all its shares in Optima Telekom in January 2020 (from 1 to 31 January 2020) in a competitive international call for tender and the ad published in at least one respectable international financial journal.
The sales process, which is to be transparent, objective, non-discriminatory and in accordance with best practices, must be prepared by HT no later than six months before the beginning of the sale, in other words, by 1 July 2019. HT is obliged to inform the CCA about the process and the data involving the assessment of the value of Optima. During the preparation of the sales process, an independent consultant will estimate the value of Optima.
In the event that within six months from the starting date of the sale of the shares, there would be no interest for Optima’s takeover, or if the bids submitted for the purchase of Optima shares would not turn out objectively acceptable, HT shall engage an investment banker mandated to assist the sale of Optima.
Should Optima’s shares not be sold by 10 July 2021, in other words, within the seven-year period of HT managing the operation of Optima’s businesses, HT’s control over Optima shall automatically cease and HT would have to transfer all the management rights in Optima to Zagrebačka banka or to an unrelated third party.
This new decision of the CCA partially repeals its decision of 19 March 2014 in the sense of which it conditionally approved the concentration between HT and Optima Telekom. Some circumstances that could not be predicted or avoided and that have been beyond the control of the parties to the concentration lead to the situation in which certain committments defined in the 2014 decision could not be met within the prescribed deadlines.
Consequently, the new decision defines new measures, conditions and deadlines that must be met by the parties to the concentration in the forthcoming period, with the view to retaining Optima as the third independent rival in the relevant market, or to open, through the sales of Optima, a possibility of creating a new third operator in the Croatian telecommunication market. Therefore, this new decision sets forth that if two or more offers of equal value should be made during the sale of Optima shares, advantage in the purchase will be conferred to the bidder that, at the moment of the purchase, is not present in the relevant market.
The new decision further specifies the conditions for the management of Optima in the period in which HT exercises control over it, while the remedies concerned refer to Optima’s assets expressed as the customer base and infrastructure.
The CCA also issued the decision on the basis of which it conditionally approved the concentration between H1 Telekom and Optima Telekom. The committments offered by Optima with the objective of eliminating the negative effects of the concentration concerned have been accepted by the CCA.
First, Optima committed itself to allowing the use of free colocation space during the duration of the concentration on all its colocations existing prior to the merger with H1 Telekom, provided that it can ensure conditions for rent or sub-rent. In order to comply with this measure, Optima will design a Minimum Offer that will determine the terms and procedures for making a request for free capacity utilization.
Optima is also obliged to offer to the interested parties the purchase, lease or sublease of emptied H1 colocations from which H1 will migrate to Optima’s colocations. The purchase procedure must be transparent – based on a competitive call for tenders – and Optima must complete it within one month after the migration. The commercial conditions for sub-rental of free space including the price of use must be based on objectively justified costs for the implementation of this measure.
Optima also committed itself to publish its wholesale offer, based on which interested third parties may also use H1 Telekom infrastructure.
Taking into account the new conditions stated in these two decisions of the CCA, HT and Optima are both committed to re-select a trustee that will monitor the fulfillment of the imposed measures and submit regular reports to the CCA. The trustee’s re-selection and operation costs shall be borne by Optima.
Both decisions of the CCA will be published on its web site and in the Official Gazette.