ISTANBUL, 2 July 2005 — Oger Telecoms of Saudi Arabia offered the top bid of $6.55 billion yesterday for a majority stake in state-owned landline telecommunications company Turk Telekom in an auction by Turkey’s privatization agency.
The sale of the 55 percent stake depends on final approval from Turkey’s competition agency and the Cabinet, said Metin Kilci, head of the government privatization agency.
Kilci conducted the auction, which was broadcast live on television, between Oger and a group headed by Emirates Telecommunications Corporation, or Etisalat, based in Dubai. The bidding began at $5.95 billion and rose through seven rounds in increments of $50 million.
Saudi Oger Group’s Oger Telecoms joined with Telecom Italia SpA and BT Group PLC’s international consulting arm BT Telconsult to form its consortium. The Oger group is owned by the family of slain Lebanese former Prime Minister Rafik Hariri.
“It’s our first investment in Turkey and we’re very excited for the future,” said Muhammad Hariri, speaking after the auction.
The auction was the state’s seventh attempt in a decade to sell its most valuable asset. Earlier efforts ran into resistance from labor unions concerned about jobs, and from the military, which was concerned about the possible sale to a non-Turkish company of a state asset with national security implications.
Turkey’s privatization agency had accepted bids from four consortiums. The agency earlier yesterday dropped offers from consortiums led by Turkish firms Koc Holding and Turkcell before setting up the bidding war between Etisalat and Oger.
The winning bid of $6.55 billion will be made in an initial payment of 20 percent of the total price plus five equal installments.
Ankara is privatizing Turk Telekom as part of an agreement with the International Monetary Fund.
