Vodafone to Sell Spanish Unit to Zegona Communications for Around $5.3 Billion -- Update
31 Octubre 2023 - 2:34AM
Noticias Dow Jones
By Elena Vardon
Vodafone Group has agreed to sell its Spanish unit to European
telecommunications investment company Zegona Communications for an
enterprise value of around 5 billion euros ($5.31 billion).
The U.K.-based telecommunications group on Tuesday said the deal
is for 100% of Vodafone Spain.
The consideration is for at least EUR4.1 billion in cash and up
to EUR900 million in redeemable preference shares, Vodafone said.
The shares will be redeemed no later than six years after the
closing of the transaction for an amount made up of the
subscription price and accrued preferential dividend, it said.
As part of the deal, the companies entered an agreement for
Vodafone to provide certain services to Vodafone Spain for a charge
of around EUR110 million a year. They will also enter a brand
license agreement that allows Zegona to use the Vodafone brand in
Spain for up to 10 years after the completion of the transaction.
Other potential arrangements for services include access to
procurement, "Internet of Things," roaming and carrier services,
Vodafone said.
"We are very excited about the opportunity to return to the
Spanish telecoms market," Zegona Chief Executive Eamonn O'Hare
said.
Zegona said it entered into committed debt financing of EUR4.2
billion and a committed revolving credit line of EUR500 million to
fund the acquisition, along with the EUR900 million in financing
provided by Vodafone. It also intends to raise between EUR300
million and EUR600 million in equity from institutional investors
at GBP1.5 for each new share.
The transaction--which constitutes a reverse takeover--is set to
complete in the first half of 2024, subject to certain approvals
from shareholders and regulatory clearances. Zegona said it its
targeting completion in the first quarter and that trading in its
shares remains suspended pending the publication of a prospectus on
the acquisition.
"The sale of Vodafone Spain is a key step in right-sizing our
portfolio for growth and will enable us to focus our resources in
markets with sustainable structures and sufficient local scale,"
Vodafone Chief Executive Margherita Della Valle said. The group
will review how to best use the proceeds from the sale at
completion, it said.
Write to Elena Vardon at elena.vardon@wsj.com
(END) Dow Jones Newswires
October 31, 2023 04:19 ET (08:19 GMT)
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