FRANKFURT, June 27 (Reuters) - Deutsche Telekom AG on Sunday set a price of 39.50 euros for the 285.9 million shares sold in a secondary share offering that was two times oversubscribed.
But the former telephone monopoly still failed to provide the information that investors really want -- how it plans to spend the 11 billion euros it is raising from the issue.
The issue price matched Telekom's closing share price on Friday when it had fallen 6.8 percent amid reports of selling by some institutional investors seeking to cheapen the offering. The new shares start trading on Monday.
Telekom Chief Executive Ron Sommer told a news conference in Frankfurt the issue met with strong demand from private and institutional investors worldwide, with 60 million shares ordered in the United States and Japan alone.
Overall demand totalled about 500 million shares. Sommer said the issue price was 13 percent above the market price of just under 35 euros when the issue was launched on May 27.
''It leaves enough latitude for the T-share to have good prospects, in the interest of investors, for the price has already been quoted at more than 45 euros,'' Sommer said.
The price for qualifying retail investors in euro member countries who used available incentives was 37.50 euros, reflecting a discount of two euros.
Private investors in Germany and the euro area will be allotted about 62 percent of the offering. Telekom said it now had more shareholders outside its home market than any other company worldwide.
Orders for the minimum volume of 50 shares were allocated in full. Investors who placed bigger orders received 50 shares plus 45 percent of all additional shares ordered.
Telekom offered 250 million shares, plus 30 million shares set aside for a greenshoe or overallotment option. Another 5.9 million are reserved for employees.
Sommer said the large number of shares bought in Italy, Spain, France and the Netherlands ''demonstrate that the T-share is the first real international share for the retail investor.''
But he did not provide fresh news on Telekom's acquisition plans beyond reiterating it needed the money for investment in business areas where it is seeking to grow -- mobile telephony, Internet services and computer and telecoms integration.
Asked to say which companies Telekom has set its sights on, Sommer said: ''I will not name any names today.''
Many fund managers want to see Telekom start delivering on Sommer's plan to turn the former monopoly into an international powerhouse, especially after its merger with Telecom Italia SpA collapsed last month.
Sommer has promised to bounce back by buying his way into key markets like Britain and the United States. He also wants to stock up Telekom's position in Internet-related businesses.
Telekom was one of five bidders seeking to buy UK mobile group One2One. But last week German business daily Handelsblatt, citing informed sources, said the company was no longer willing to increase its offer for One2One.
Telekom was also reportedly interested in expanding its 10 percent stake in Sprint Corp (NYSE:FON - news), the U.S. partner in the Global One venture with France Telekom SA .
Other reports have linked the company with Internet music retailer CDNow Inc (Nasdaq:CDNW - news) and systems integrator Electronic Data Systems Corp (NYSE:EDS - news).
''Usually when a company makes a secondary offering, they tell people what you are going to do with the money,'' Gottfried Heller at investment company Fiduka Depotvervaltung in Munich said last week. ''That is a big mystery with Deutsche Telekom
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