Hit #62

Telesystem International Wireless (TIWI) recently sold all its assets to Vodafone and is distributing the cash to shareholders, followed by a liquidation.

The distribution will amount to around $15.8/share, with another tiny distribution possible, if any cash is left after paying claims, in a few weeks.

The planned distribution represents a 9% premium over my average cost of $14.52/share.

This wasn't a core takeover play. It was in my international portfolio. I was expecting more long-term growth, rather than a outright sale of assets.

Telesystem, through its majority stake in MobiFon and Oskar Mobil had a good share of the Romanian and Czech mobile market. With this purchase, Vodafone (VOD) becomes an attractive long-term play on growth in Eastern Europe. Vodafone will likely be going after more assets in Eastern Europe as governments sell their ownership in various telco ventures. I will be adding a few Vodafone shares soon.

Why did Telesystem sell its assets at such depressed values ? Did the owners just want to cash out and retire ? The transaction smacks of desperation to me.

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