The UK privatisation programme may have reached an end but on current planning it will

The UK privatisation programme may have reached an end, but, on current planning, it will take Germany’s government until 2006 to dispose of Deutsche Telekom. The company’s financial adviser is Rothschilds, an old hand at privatisation, and the PR advisers are Dewe Rogerson, who have looked after more UK privatisations than anyone, most recently the Railtrack and British Energy sell-offs.For them the timing could not be better. The share sale will be the second biggest in the world after the flotation of the Japanese telecoms company NTT in the mid-1980s.So far, 1.5 million individuals have registered with the share information office to be sure of their discount on the first 300 shares, expected to be priced at around DM33.It is no coincidence that the similarities are so striking between the Deutsche Telekom flotation and the UK offers of the last decade. But Deutsche Telekom is in a different league.When the shares start trading in late November, the company will be capitalised at pounds 32bn to pounds 39bn. The campaign began with posters and television commercials of people holding their arms aloft in the shape of a T to signify that this is the year of the T (or Telekom) share offer.The tempo is about to step up with a series of advertisements fronted by Manfred Cook, a well-known German television actor whose most famous portrayal is of a Berlin lawyer – a sort of cross between Perry Mason and Inspector Morse.Germany has seen nothing like it since the early 1960s when the public was invited to buy shares in Volkswagen.

Priority will be given to investors who register with the equivalent of the share information office and retail investors will be eligible for a discount to the price paid by institutions in the international offer.The marketing campaign accompanying the offer is also familiar, if a little less inventive than the British campaigns on which it is styled. Up to 40 per cent of the shares are being set aside for the retail offer and, in the style of UK privatisations, small investors are being tempted to apply with a host of incentives.
In format and presentation, the Deutsche Telekom sell-off is barely distinguishable from those of British Gas and BT in the1980s. All tickets between the two would be interchangeable, he added.Leading article, page 15. Europe’s biggest ever flotation, the DM15bn (pounds 6.5bn) sale of shares in Deutsche Telekom, was launched yesterday with a campaign to tell Fritz, Sid’s German counterpart, all about the joys of popular capitalism. But the amount will tail off over the life of the franchise, at the end of which, in 2011, Connex will make a payment of pounds 2.8m to the franchising director.South Eastern is not allowed to merge with Network SouthCentral but Mr Hurel said there would be joint use of administrative systems, logos, ticketing services, and branding.

If such a big new order did not go to the existing Roscos, it would put a big question mark over their future existence, once their present leases ran out.Connex will receive pounds 125.4m in subsidy to run South Eastern, compared with BR’s present subsidy of pounds 120.8m. He said Connex had examined the way in which it would acquire its new trains and “we have decided that, at the moment, the best method is to form our own Rosco”.However, now that the bid for South Eastern trains had been confirmed, Connex would be talking to the Roscos and train manufacturers to see if a better deal emerged. SWT is now controlled by Stagecoach but the company’s bid for one of the rolling stock companies (Roscos), Porterbrook, raises the possibility of the regulatory authorities making it divest the SWT franchise.Mr Hurel also threw the whole issue of the future of the rolling stock market into further confusion. The new franchise is for 15 years and involves the purchase of 125 train sets at a cost of pounds 400m, a requirement of the terms of the franchise set by the franchising director, Roger Salmon. The first of the new units will be in service by 1999.At the launch yesterday, the Connex vice-chairman Antoine Hurel said that if the South West trains franchise – the third part of the old Southern Region – came on the market, “we would bid for it”.