Deutsche Telekom has reached an agreement with Vivendi, Polish company Elektrim and the creditors of Elektrim, among which the Polish state and Elektrim's bondholders, to secure 100 percent, undisputed ownership of Polish mobile operator Polska Telefonia Cyfrowa (PTC). Closing of the transaction is subject to conditions. Initially Deutsche Telekom held 49 percent of the shares in PTC. In 2005 Deutsche Telekom exercised a call option for a further 48 percent of the shares in PTC (increasing its stake to 97 percent) and in 2006 made an initial payment in the amount of EUR 0.7 billion to Elektrim. Deutsche Telekom will now make a second payment for the 48 percent of PTC to Elektrim. In addition, Deutsche Telekom will acquire the last outstanding 3 percent of PTC by purchasing the two interim holding companies Carcom and Autoinvest, held by Elektrim (49 percent) and Vivendi (51 percent). Deutsche Telekom will pay a total of EUR 1.4 billion to Elektrim and Vivendi. The larger portion of this payment will go to Elektrim as the remainder of the purchase price for the 48 percent of PTC subject to the call option. A smaller portion of DT's total payment will be a settlement of all remaining legal disputes among the parties involved. Vivendi said it would receive a total EUR 1.25 billion, and surrender all claims to PTC. The agreement now reached will conclusively settle all legal disputes between the three parties before various courts and arbitral tribunals and ensure a 100 percent shareholding in PTC for Deutsche Telekom. Based on the payments now agreed and the first payment following the exercise of the 2005 call option, the total price of a 51 percent stake in PTC is approximately EUR 2.1 billion. Taking into account the Polish company's cash balance of EUR 1.5 billion and based on the adjusted EBITDA expected for 2010, this results in a multiple of below 4. PTC is the third largest mobile operator in terms of revenue, behind market leaders PTK Centertel and Polkomtel.
