Telekom still seeking buyer for Melly’s Etel

Back in April, just four months after acquiring Irish telco Etel for €90m, Telekom Austria was already looking to offload the eastern European network.

And it’s still looking for a buyer.

Founded by entrepreneur Sean Melly in 1999 (pictured, left, with O'Brien's Sandwich bar founder Brody Sweeney), Etel has about 250,000 fixed network customers in Austria, while it also has a small customer base in countries such as the Czech Republic, Hungary and Slovakia.

Institutional investors, including Dresdner Kleinwort Capital, Intel, Argus and Greenhill, had stuffed at least €80m into Etel before it was sold, and while they were probably not deliriously happy with their return, Melly and other shareholders did reasonably well from the buyout.

He received in the region of €10m from the acquisition, while businessman and former Central Bank director Bernard Somers realised a similar amount.

But Etel obviously hasn’t lived up to expectations for Telekom Austria. Last April, the head of the Austrian firm’s fixed network unit, Rudolf Fischer, said that the company wanted to sell Etel in order to slow the pace of revenue decline from Telekom Austria’s fixed-line network. It was speculated at the time that Colt Telecom, Verizon and Tele2UTA would be potential suitors for Etel.

Six months later and a sale hasn’t been finalised.

Others now in the frame for Etel include GTS Energis, which already operates in Eastern Europe, Mediatel, and Warsaw-headquartered Supernova Capital.

It’s all only of passing interest, no doubt, to Melly, who has already gone on to other things. After shifting Etel, he made a multi-million euro investment in Dublin-based medical device firm Vasorum. It could just lead to his next big payday.

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