EuroTeleSites debuts on Vienna Stock Exchange, shares fall below reference price
In recent developments, EuroTeleSites, a tower spinoff of Telekom Austria (OTC:TKAGY), made its debut on the Vienna Stock Exchange this Friday. However, the company's shares commenced trading at a price lower than expected, marking a 10% drop from the reference price set by its parent company, Telekom Austria. The initial trading price was €4.31 per share, significantly lower than the reference price of €4.95.
This initial trading price resulted in EuroTeleSites' market capitalization being pegged at €716 million ($763.4 million), as reported by the Vienna Stock Exchange. Despite the lower-than-expected debut, the listing of EuroTeleSites is part of a broader trend among European telecom operators to take their telecom-tower companies public. This strategy is seen as an effective way to offload infrastructure assets.
On the same day, Telekom Austria's shares also experienced a sharp decline, falling 16% to €6.48. This decrease came after one quarter of EuroTeleSites' reference price was deducted from Telekom Austria's stock price, reflecting the share-distribution ratio between the two entities.
Prior to EuroTeleSites' listing, Telekom Austria had announced that its shareholders would receive one share in EuroTeleSites for every four shares they held in Telekom Austria. This move mirrored the share-distribution ratio between the two companies and may have contributed to the decline in Telekom Austria's stock price on Friday.
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