The British Zegona has become the first shareholder of Euskaltel, after raise your share from 16.41% to 20.94% of the capital, as the group has informed the National Securities Market Commission (CNMV).
Zegona, until now the second shareholder, publicly announced that he wanted to take control of the Basque company through purchases on the stock market. For this, he approved the money in pounds -150 million euros at today's exchange rate- to take control of Euskaltel, an amount he wants to reach 29 percent of the capital.
The so far top shareholder, the Basque bank Kutxabank, has 19.8 percent of the company. Zegona is a shareholder of the Basque firm since July 2017, when Euskaltel bought the Asturian Telecable, property of Zegona, and paid to the British part in shares of the own Euskaltel, to 9.5 euros the title.
After two years, the disabilities -the action today stands at 8.31- are at the origin of the discrepancies of Zegona with the management, coming to publicly request more cost cuts to the current management team headed by the president, Alberto García Erauzkin.
At the last Shareholders' Meeting, held just one week ago – on day 1-, the representative of Zegona did not attend the meeting and not one word was dedicated to the matter, about which neither did the shareholders ask.
The management bet on the Board to continue with its own strategic plan, different from the intentions of Zegona. The current team, after the integration of Euskaltel, the Galician R and the Asturian Telecable, is betting on the expansion in the neighboring markets: Euskaltel has started to market its products in Navarra, León, Cantabria and La Rioja and Catalonia.
On the other hand, Zegona's intention seems to be -it has not been officially confirmed-, use Euskaltel as an entry for the Virgin brand for all of Spain.
In fact, the Virgin group has been one of the two – the other is Barclays – that have lent money to Zegona – for a joint amount of up to a maximum of 30 million pounds – 34 million euros at today's exchange – for that Zegona can buy the shares of Euskaltel.
The rest of the money for the purchase has been taken out by Zegona of an extension of its gross capital in at least 100 million pounds -116 million euros-, which adds about 150 million dedicated to the purchase of shares of the Basque company .
The initial intention of Zegona was to present an offer at 7.75 euros per Euskaltel title, but decided to change its strategy and bet on purchases in the stock market. Today the shares have opened the day quoting at 8.31 euros. After knowing the purchase, at noon they quoted at 8.38 euros, which is a rise of 1 percent.
In principle, the purchases of shares by Zegona will not stop here, since it announced its intention to reach 29.9 percent of the capital, without exceeding 30 percent, which avoids having to launch a takeover bid.
Zegona has signed a pact of concerted action with Talomon Capital Ltd – this is a shareholder of both Zegona and Euskaltel – and Talomon is expected to increase its stake in Euskaltel to a total of 2.4%, so that Zegona would have to buy about an additional 5 percent, up to just over 26 percent, and the rest up to 29 percent would be Talomon's shares.
In addition to the repercussions on the strategy, the majority of Zegona is viewed with reluctance by the Basque institutions, by the doubts about the decisions that will be made about the headquarters of the company born in Euskadi, the employment and its future permanence in the shareholding , given that it is an investment fund that is listed on the London stock exchange and its shareholders are in turn great fund managers.