In September 2019, a group of Turkish banks hired Morgan Stanley as financial adviser to sell their 55 per cent stake in the country’s largest phone company/Bloombergby Bloomberg
A majority stake in Turkey’s biggest phone operator is attracting potential buyers despite risks that Turk Telekom’s licence will not be extended beyond 2026.
Investors from the Arabian Gulf have expressed interest in the 55 per cent stake held by banks but concerns that the government may not lengthen Turk Telekom’s licence is hindering formal offers because there will not be enough time for a purchaser to recoup their investment through dividend payouts.
The government is reluctant to extend Turk Telekom’s licence because doing so could encourage Turkcell Iletisim Hizmetleri and Vodafone Group’s Turkey unit to demand the same treatment when their licences are up. 3G and 4G licences for all operators expire in 2029, while Turk Telekom’s landline and 2G licences end in 2026.
Turk Telekom has an enterprise value, a gauge for deals that includes market value plus net debt, of $7.2 billion, that would make a 55 per cent stake worth almost $4 billion. The stock has gained 51 per cent over the past 12 months. Turkey’s Treasury holds 25 per cent stake at the company while Türkiye Varlık Fonu, the country’s sovereign wealth fund, holds 6.7 per cent. The remainder is trading on Borsa Istanbul.
Akbank is the biggest shareholder in LYY Telekomunikasyon, the special purpose vehicle created to hold the shares owned by the banks, with 35.6 per cent followed by Turkiye Garanti Bankasi with 22.1 per cent and Turkiye Is Bankasi with 11.6 per cent.