Europe’s biggest phone company, Deutsche Telekom, has been explaining to shareholders at its annual general meeting, the thinking behind its overseas acquisitions. It has just bought 25% of Greece’s OTE for 3.2 two billion euros.
But for the shareholders it was the price of the stock that matters as of those attending the AGM explained: “The main problem is that the share price is always lagging behind. Mr Obermann has tied his personal future to the share price and we can only hope that he’ll succeed in time, before the share prices takes him down. It would be a pity if that happens, because he’s doing a good job.”
It has been suggested that the German government – which owns nearly a third of Deutsche Telekom – has been pressing the management to make large acquisitions in the hope of raising its sagging share price.
René Obermann, Deutsche Telekom’s chief executive said: “We’re not expanding abroad just for the sake of it, we’re not doing it because we’re forced to, and we’re not going to do it to gain status, but it’s done to add value for our shareholders.”
The Greek purchase follows weeks of negotiations and will boost Deutsche Telekom’s presence in southeast Europe. OTE has subsidiaries in Romania, Bulgaria, Macedonia and Albania as well as a 20% stake in Serbia’s leading telecoms provider.