Bjorgolfsson in quick sale to AIG

Novator, the acquisition vehicle of Icelandic businessman Thor Bjorgolfsson, has sold its 65 percent stake in a Bulgarian telecoms company for €1.6 billion to AIG Investments, a year after it bought the business from an Advent International-led consortium.

AIG Investments has bought a 90 percent stake in listed Bulgarian Telecommunications Company from Novator and other shareholders. AIG Investments will launch a tender offer for the remaining shares, it said in a statement. The company has a market capitalisation of BGN3.2 billion (€1.6 billion).

AIG Investments will acquire Novator’s 65 percent stake in the Bulgarian Telecommunications Company for BGN2.1 billion at BGN11.25 per share. Novator acquired the company via a refinancing in 2006, for an undisclosed sum.

Advent International and partners acquired the company for €230 million in 2004 following a two year privatisation process. Its partners included Enterprise Investors, the EBRD, NBG Venture Capital, the Abu Dhabi Investment Authority, Alpha Associates, the Dutch Development Bank, DEG and Mezzanine Management. 

Thor Bjorgolfsson said in a statement that he had been involved with the company since 2003.

Pierre Mellinger, AIG Investments’ head of central and eastern Europe, said: “It is the most significant deal in the region. It has many local customers, which has been bolstered by the increased incomes in the region.” Technical expertise is also strong in the region due to the resources provided by the former Soviet Union, he said. 

“A deal of this size would not have been possible if the country had not joined the EU,” he said. The status affects the amount of leverage available as well as the potential for the future development of companies.  

It is also the first large deal where regulatory competition approval in Bulgaria has passed to the EU.

The telecoms sector has proved a constant area of activity for buyout firms. In July GMT Communication Partners acquired Melita Cable for €170 million ($230 million) and Shaul Shani alongside Ashmore Investment Management acquired ECI Telecom for around $1.2 billion (€882 million).