Bulgaria`s M&A market deteriorates in 201005.01.2011

Last year is likely to emerge as one of the worst periods for the mergers and acquisitions (M&A) market in Bulgaria, although in the last months of 2010 the segment witnessed a rebound in the activities of both buyers and sellers.
Raiffeisen Investment and Entrea Capital estimate the value of M&A deals in Bulgaria last year at half of the EUR 2 billion (USD 2.7bn) recorded for 2009, with EUR 700 million of the total generated in the first ten months of the year. The calculations of Dnevnik take into account 50 M&A deals worth a combined EUR 1 billion for 2010, with some of them yet to be finalised.
Media, telecommunication and property were the sectors to see the biggest deals last year, mainly necessitated by companies` inability to cover debts or part of their` measures to leave the domestic market.
Under calculations of Dnevnik, the country`s M&A market would comprise 50 deals worth a combined EUR 1 billion for 2010, with some of them yet to be finalised.

Top 10 M&A deals in Bulgaria

1. bTV (EUR 296.3 million)
The largest deal in Bulgaria for 2010 was the USD 400 million sale of broadcaster bTV to Central European Media Enterprises (CME) in early February. By comparison, rival Nova Television was sold for EUR 620 million to Modern Times Group two year earlier.
Via the transaction, CME also took control of bTv`s theme channels - bTV Comedy and bTV Cinema, as well as Balkan News` 74% stake in CJ Radio Company, which runs a string of radio channels Classic FM, Jazz FM, N-JOY, Z-Rock and Melody.

2. Mall Varna (EUR 95.2 million)
Second came Austrian Raiffeisen Bank`s acquisition of Mall Varna, the big-box shopping centre in the northern Bulgarian seaside city of Varna, which was carried out through the bank`s fund Aspius Immobilien. The shopping centre was bought from UK-based Miller Developments, which in turn purchased the shopping centre from Bulgarian diversified company Interservice Uzunovi in 2008.

3. Mall Rousse and Mall Stara Zagora (EUR 85 million).
The two shopping centres, which cinema chain Cinema City offloaded to sector firm Israel Theaters, rank third in money terms. According to a statement of ?srael Theaters filed with the country`s bourse in March, it would pay EUR 70 million upon the deal`s closure, while the remainder will be disbursed nine months after the inauguration of Mall Rousse, which opened doors on December 20, 2010.
Meanwhile, the construction of the mall in Stara Zagora has not been started yet, shows data of Cinema City`s project management company in Bulgaria, RESB.

4. Spectrum Net and Megalan (EUR 83 million)
The takeover of the alternative fibre-optic network operators by cellular operator Mobiltel broke ground for the consolidation of the telecommunications business in the country.
Mobiltel paid EUR 72 million for the companies and also assumed EUR 11 million in obligations of the entities.

5. Sofiyska Voda (EUR 80 million)
The change in ownership of Sofia`s water and sewage operator Sofiyska Voda was part of UK-based United Utilities` asset sale to France`s Veolia Water, which also featured stakes in Estonian Tallinna Vesi and Poland`s Aqua.

6. Tsvetelina Borislavova`s 16% stake sale in CIBank (EUR 72 million)
The businesswoman sold her holding to the lender`s majority shareholder, Belgian financial group KBC, which now owns 100% in the financial entity. After the deal`s completion, the Belgian group unveiled plans to immediately launch a procedure to delist CIBank from the Bulgarian Stock Exchange (BSE). Borislavova agreed to dispose of her interest in the bank in September 2007.

7. NURTS (EUR 57 million)
Telecommunications group BTC managed to sell half of its shares in the National Unit Radio and TV Stations (NURTS) company to Cyprus-based Mancelord Limited for EUR 57 million after two years of unsuccessful attempts. Mancelord is represented in Bulgaria by Bromak, the majority owner of local Corporate Commercial Bank. The aim of the deal was to turn NURTS into a competitive player on the digital broadcasting market in Bulgaria and a multiplex services provider on a national scale, the telecom said in a bourse filing in August.

8. Trud and 24 Chasa (EUR 46 million)
After 13 years of doing business in Bulgaria, German WAZ Media Group decided to leave the local market by selling its dailies Trud and 24 Chasa among other assets to BG Privatinvest, partnering with local businessmen Ognyan Donev and Lyubomir Pavlov.

9. Bluehouse Capital`s hypermarkets, offices purchase (EUR 27 million)
Bluehouse Capital, the Greek private equity real estate investment management firm with a focus in the property markets of South East Europe, bought four estates for an estimated EUR 27 million from Bulgarian real estate investment trusts (REITs) ERG Capital 1 and 2, which are owned by Bulgarian American Investment Fund (BAIF).
The Greek company took control of two hypermarkets of the Praktiker chain, a distribution centre of the Swedish cosmetics company Oriflame, and a store of local supermarket chain Piccadili.

10. Eurohold`s property sales (EUR 20 million)
Bulgaria`s blue-blooded industrial and financial group Eurohold Bulgaria offloaded part of its production facilities and and proprtu units for BGN 40 million. The vast sell-off was aimed at optimising the company`s business and focusing on its core activities such as insurance, car leasing and sales. In late September, the company stated it had finalised the partial sale of its medical equipment manufacturer Etropal and plastics companies Formoplast and Plastchim-T. It also offloaded its 100% stake in minerals and industrial products testing and analyses maker Eurotest Control, its 91% stake in hotel operator Eurohotels and Iztok Plaza.

Source: Dnevnik

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