Zegona waives Euskaltel's bid but not its control through the market | Economy

Zegona waives Euskaltel's bid but not its control through the market | Economy



Zegona does not resign to control Euskaltel, but will try otherwise. The bid that had been announced to achieve at least an additional 15% of the telecommunications company is withdrawn and, as reported to the National Securities Market Commission (CNMV) will try to reach 30% of the capital of the company through the market stock market. The British company has explained to the regulator that "due to the deterioration of the situation of the capital markets during the period since the beginning of the operation, the conditions under which Zegona could obtain the necessary funds to carry out the offer do not result acceptable so that, at least, 75% of the shareholders present or represented at the general meeting of shareholders to approve the capital increase vote in favor thereof. "

Euskaltel, the telecommunications operator that integrates to the gallero cable group R and the Asturian Telecable and controls the northern Spanish market and has Kutxabank as the main shareholder, with 21.3%, in addition to Alba (10%), Capital Research (5.2%) and Abanca (4.4%). The group closed the first half of the year with a net profit of 28.8 million, an increase of 36.6%, and a 25% increase in revenues, reaching 349.3 million. Euskaltel leads the market in northern Spain, with 2.3 million households hired and 663,000 residential customers under the three brands it groups.

Zegona aspired to increase its capital in the extraordinary general meeting scheduled for the end of this month and allocate the 225 million pounds (256 million euros) of the increase, to pay its offer of 7.75 euros per Basque title -today they are trading in the market at 6, 95-. With the OPA, it would double the capital up to 30%, which would give them a sufficient majority to manage the company and change the entire management system of the company. Had he succeeded, he would have become the first shareholder of the Basque cable company, surpassing Kutxabank, current reference shareholder with 21% of the capital. Zegona has not hidden his differences with the Euskaltel management team to the point that in October he explained that he had had conversations for the incorporation of José Miguel García, former CEO of Jazztel, into Euskaltel, which he managed to re-launch until it was bought. by Orange.

The board of directors of Zegona, meeting yesterday, reached an agreement on the terms on which a shareholders' agreement would be signed, which would involve a concerted action with Talomon Capital Ltd, a shareholder of both Zegona and Euskaltel, in which it currently participates with between 1% and 2%, – could increase its participation in Euskaltel to a total of 2.4% -. In addition, Zegona intends to make a capital increase without preferential subscription rights among institutional investors whose funds allow it to carry out the acquisition of Euskaltel shares in the market, for which it has received expressions of interest from both shareholders and new investors

In addition, Zegona is studying the signing of financing agreements of a joint amount of up to 30 million pounds, including a contract with Virgin Group of up to 10 million pounds, whose funds could also be used to increase its stake in Euskaltel. Zegona intends to publish the prospectus referred to this new capital increase and call its General Shareholders' Meeting in January 2019.

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