TIDMZEG
RNS Number : 5315I
Zegona Communications PLC
13 August 2021
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ZEGONA COMMUNICATIONS PLC ("Zegona" or the "Company")
LEI: 213800ASI1VZL2ED4S65
13 august 2021
ZEGONA ANNOUNCES TER OFFER AT GBP1.535 PER SHARE
London, England, 13 August 2021 - Zegona announces the
publication of a circular (the "Circular") for a return of up to
GBP329.3 million to shareholders by way of a tender offer at a
price of GBP1.535 per share (the "Tender Offer")
Tender Offer delivers on Zegona's commitment to return capital
to shareholders after selling its investment in Euskaltel
-- On 24 May 2021, Zegona announced that on the successful
sale of its investment in Euskaltel to MásMóvil,
it would return GBP335 million in cash to Shareholders.
-- On 23 July 2021, Zegona began this return of cash to shareholders
with a GBP5.7 million dividend payment.
-- Following this dividend and the successful sale of its
investment in Euskaltel, Zegona's commitment is now to
return the balance of the GBP335 million, being at least
GBP329.3 [1] million and will do so through a Tender Offer,
-- The Tender Offer is a straightforward mechanism to return
this capital quickly and tax efficiently.
-- Today Zegona has published a Circular detailing the Tender
Offer and the required General Meeting.
-- Under the Tender Offer, each qualifying holder of Zegona's
ordinary shares (the "Shares") will be entitled to sell
approximately 98.0% of their Shares (their "Tender Offer
Entitlement") at a price of GBP1.535 per Share.
-- Shareholders may tender more than their Tender Offer Entitlement
and will be allocated a pro rata portion of any Tender
Offer Entitlement not used by other shareholders.
-- The Tender Offer will close on 5 October 2021 with cash
payments expected shortly thereafter.
Eamonn O'Hare, Zegona's Chairman and CEO commented: "Today,
Zegona is delivering on its commitment to return GBP335 million to
shareholders quickly and tax efficiently. We believe that combined
with the dividend we paid in July, this tender offer represents an
attractive return on investment for our shareholders.
We continue to see good potential to deliver attractive
shareholder returns. We intend to continue executing Zegona's
original strategy and we are actively developing a number of new
investment opportunities in the European TMT industry where we
believe we can again successfully apply our innovative 'Buy Fix
Sell' strategy"
Enquiries
Tavistock (Public Relations adviser - UK)
Tel: +44 (0)20 7920 3150
Jos Simson / Lulu Bridges - jos.simson@tavistock.co.uk /
lulu.bridges@tavistock.co.uk
FURTHER INFORMATION
On 24 May 2021, the Board announced that if the sale of its
investment in Euskaltel to MásMóvil is successful it plans to
return GBP335 million in cash to shareholders.
On 23 July 2021, Zegona began this return of cash to
shareholders with a GBP5.7 million dividend payment. After payment
of this dividend, Zegona's commitment is now to return the balance
of the GBP335 million, being at least GBP329.3 [2] million (the
"Return of Capital"). As announced on 29 July 2021, Zegona has
initiated steps to reduce the Company's share premium account to
prepare for the Return of Capital.
As shareholders will be aware, MásMóvil's takeover bid for
Euskaltel has become wholly unconditional and the sale proceeds
have now been received.
Launch of Tender Offer
The Board confirms today the launch of the Tender Offer (further
details of which are set out below), at a price of GBP1.535 per
Share (the "Tender Price"), in order to effect the Return of
Capital. Under the Tender Offer, each Qualifying Shareholder will
be entitled to sell approximately 98.0% of their Shares at the
Tender Price (their "Basic Tender Offer Entitlement"). Qualifying
Shareholders may tender more than their Tender Offer Entitlement,
up to 100% of their Shares, and will be allocated a pro rata
portion of any Tender Offer Entitlement not used by other
shareholders for these additional Shares tendered.
Publication of Circular and Notice of General Meeting
In order to explain the details of the Tender Offer and obtain
the necessary shareholder approvals for the proposed Return of
Capital by way of the Tender Offer, and in order to enable
Qualifying Shareholders to confirm their intentions in respect of
the Tender Offer, Zegona announces that the following documents
have today been posted to shareholders:
-- a circular setting out details of the Tender Offer and
containing a Notice of General Meeting at which shareholder
approval for the Tender Offer will be sought (the "General
Meeting");
-- Tender Forms in respect of the US Tender Offer and the
Non-US Tender Offer; and
-- a Form of Proxy for the General Meeting.
The above documents will be submitted to the Financial Conduct
Authority via the National Storage Mechanism and will shortly be
available to the public for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
These documents will also be available on the Company's website
at
https://www.zegona.com//media/files/z/zegona/shareholder-information-disclaimer-docs/210812-shareholder-circular.pdf
, subject to certain access restrictions.
The General Meeting will be held at Travers Smith LLP, 10 Snow
Hill, London EC1A 2AL at 11:00 a.m. on 6 September 2021.
Capitalised terms used but not defined in this announcement
shall have the meanings set out in the Circular.
Details of the Tender Offer as a whole
The Tender Offer is comprised of the Non-US Tender Offer (which
is being conducted by Canaccord Genuity Limited ("Canaccord")) and
the US Tender Offer (which is being conducted by Zegona). Although
the Non-US and US Tender Offers are being conducted on
substantially the same terms, certain specific details relating to
each are set out below, together with a timetable of key events in
respect of the Tender Offer.
Each Qualifying Shareholder will be entitled to sell all, or
part, of their Basic Tender Offer Entitlement under the Tender
Offer at the Tender Price. Each Qualifying Shareholder may also
tender more than their Basic Tender Offer Entitlement under the
Tender Offer and that may be acquired depending on the actions of
other Qualifying Shareholders.
The Tender Offer will close at 1.00 p.m. on 5 October 2021 and
tenders received after that time will not be accepted unless
otherwise approved by both Canaccord and Zegona. It is expected
that Qualifying Shareholders who successfully tender their Shares
will receive payment for such Shares on or before 14 October
2021.
The Tender Offer is subject to, amongst other things, the
passing of the special resolution at the General Meeting to approve
and authorise the Tender Offer (the "Resolution").
Details of the Non-US Tender Offer
Subject to certain conditions (including the Resolution being
passed at the General Meeting), the Non-US Tender Offer will be
implemented on the basis of Canaccord, acting as principal and not
as agent, nominee or trustee, acquiring the successfully tendered
Shares under the Non-US Tender Offer and a subsequent repurchase of
the tendered Shares from Canaccord by the Company by way of an
on-market transaction on the London Stock Exchange, in both cases
at the Tender Price (the "Repurchase"). To give effect to these
arrangements, Canaccord has entered into a Put and Call Option
Agreement with the Company. Shares Repurchased in connection with
the Non-US Tender Offer will be cancelled.
Details of the US Tender Offer
Subject to certain conditions (including the Resolution being
passed at the General Meeting), the US Tender Offer will be
implemented directly by the Company (or an agent of the Company),
by way of an on-market transaction on the London Stock Exchange at
the Tender Price. Shares successfully tendered to it in connection
with the US Tender Offer will be cancelled. The US Tender Offer
will be open solely to those US Shareholders on the Register on the
Record Date who are both "qualified institutional buyers" as
defined in Rule 144A under the US Securities Act of 1933, as
amended, and "qualified purchasers" as defined in Section 2(a)(51)
of the US Investment Company Act of 1940, as amended.
EXPECTED TIMETABLE
All dates 2021
Publication of the Circular 13 August
Tender Offer opens 13 August
Latest time and date for receipt of Forms 11.00 a.m. on 2 September
of Proxy
Time and date of General Meeting 11.00 a.m. on 6 September
Outcome of General Meeting announced by 6 September
Publication of interim results on or before 30 September
Latest time and date for receipt of Tender 1.00 p.m. on 5 October
Forms and TTE Instructions from CREST Shareholders
(i.e. close of Tender Offer)
Record date for the Tender Offer 6.00 p.m. on 5 October
Outcome of Tender Offer announced by 6 October
Purchase of Shares under the Tender Offer 7 October
Cheques despatched for certificated Shares By 14 October
purchased pursuant to the Tender Offer, payment
through CREST for uncertificated Shares purchased
pursuant to the Tender Offer, despatch of
balance share certificates for unsold certificated
Shares and CREST accounts credited with uncertificated
Shares being returned to Shareholders
Notes
The times and dates set out in the timetable above and
throughout the Circular that fall after the date of this
Announcement are based on the Zegona's current expectations and are
subject to change. Any changes to the timetable will be notified to
Shareholders by an announcement made by Zegona through a Regulatory
Information Service.
The timetable assumes that there is no adjournment of the
General Meeting. If the scheduled date for the General Meeting
changes, the revised date and/or time will be notified to
Shareholders by an announcement made by Zegona through a Regulatory
Information Service.
References to times in this document are to London time.
Update on other matters
As noted in the Company's announcement on 24 May 2021, as part
of its acquisition of Telecable in 2017, Euskaltel agreed to pay
Zegona a contingent consideration equal to 35% of the value of
Telecable's tax assets once these were confirmed as being available
for use by Euskaltel. Zegona had expected Euskaltel to pay this
contingent consideration no later than 15 days after the settlement
of the offer for Euskaltel at the value of EUR8.654 million, which
is the liability to Zegona recorded in Euskaltel's published
audited financial statements for the year ended 31 December 2020.
However, it became apparent that Euskaltel would seek to either
reduce and delay the payment to Zegona substantially or require
Zegona to deliver a financial or insurance instrument to transfer
any risk in the tax assets at Zegona's cost. Each of these
alternatives was not acceptable to Zegona, so it has sold the right
to the contingent payment for EUR6.4 million in cash.
As also noted in the Company's announcement on 24 May 2021, it
committed to return cash using the mechanism which the directors
believe offers the best combination of timeliness, cost
effectiveness and tax efficiency, which the directors have
concluded is a tender offer. This has resulted in forecast
additional costs of approximately GBP2 million, principally 0.5%
stamp duty payable on the acquisition of the shares, which will
reduce the net assets of the business following the completion of
the Tender Offer.
The impact of these two changes reduces the expected Net Asset
Value [3] of the Company immediately following the Tender Offer
(assuming it completes and is accepted in full) to approximately
GBP6.8 million, which is equivalent to approximately 3.1 pence per
share based on the number of shares currently outstanding [4] .
Zegona's management team has also committed to re-invest up to
GBP4 million of the incentive payment it will receive on completion
of the Tender Offer [5] , however the aggregate amount of this
investment will be scaled back pro rata if the shares to be issued
would otherwise exceed 28.1% of the issued share capital of the
Company at the time.
Current estimates for the expected Net Asset Value of the
Company following the completion of the Tender Offer would result
in the number of Shares subscribed for by Management being scaled
back. As a result, it is currently expected that the aggregate
subscription consideration for the shares to be subscribed by
Management will be approximately GBP2.7 million, and following such
subscription the Company would have free cash of approximately
GBP9.5 million.
IMPORTANT NOTICES
This announcement has been issued by, and is the sole
responsibility of, the Company.
This announcement has been prepared in accordance with English
law, the Listing Rules and the Disclosure Guidance and Transparency
Rules and information disclosed may not be the same as that which
would have been prepared in accordance with the laws of
jurisdictions outside England.
The distribution of this announcement in jurisdictions outside
the United Kingdom may be restricted by law and therefore persons
into whose possession this announcement comes should inform
themselves about, and observe such restrictions. Any failure to
comply with the restrictions may constitute a violation of the
securities law of any such jurisdiction.
Canaccord, which is authorised and regulated by the Financial
Conduct Authority, is acting exclusively for Zegona and for no one
else in connection with the Non-US Tender Offer and Canaccord, its
affiliates and its and their respective directors, officers,
employees and agents are not, and will not, be responsible to
anyone other than the Company for providing the protections
afforded to customers of Canaccord nor for providing advice in
relation to the Non-US Tender Offer. For the avoidance of doubt,
none of Canaccord, its affiliates and it and their respective
directors, officers, employees and agents will be responsible for,
or liable in relation to the US Tender Offer, any other
transaction, arrangement or other matter referred to in this
announcement, or the Circular, other than the Non-US Tender
Offer.
Apart from the responsibility and liabilities, if any, which may
be imposed on Canaccord by the Financial Services and Markets Act
2000 (as amended), the Financial Services Act 2012, or the
regulatory regimes established thereunder, Canaccord does not
accept any responsibility or liability whatsoever nor make any
representation or warranty, express or implied, concerning the
contents of this announcement or the Circular, including its
accuracy, completeness or verification, or for any other statement
made or purported to be made by it, or on its behalf, in connection
with the Company, the Non-US Tender Offer, the Circular or this
announcement. Each of Canaccord, its affiliates and their
respective directors, officers, employees and agents accordingly
disclaims all and any responsibility or liability whether arising
in tort, contract or otherwise (save as referred to above) which it
might otherwise have in respect of this announcement, the Circular
or any such statement.
The US Tender Offer is made solely by the Company. While the US
Tender Offer is being made available to US Shareholders, the right
to tender Shares is not being made available in any jurisdiction in
the United States in which the making of the US Tender Offer or the
right to tender Shares would not be in compliance with the laws of
such jurisdictions.
The US Tender Offer is being made for the securities of a UK
company and is subject to UK disclosure requirements, which are
different from those of the United States. The settlement procedure
with respect to the US Tender Offer will be consistent with UK
practice, which differs from US domestic tender offer procedures in
certain material respects, particularly with regard to date of
payment. US Shareholders should note that the Shares are not listed
on a US securities exchange and the Company is not subject to the
periodic reporting requirements of the US Securities Exchange Act
of 1934, as amended, (the "Exchange Act") and is not required to,
and does not, file any reports with the US Securities and Exchange
Commission thereunder. The US Tender Offer is not subject to the
disclosure and other procedural requirements of Regulation 14D
under the Exchange Act. The US Tender Offer will be made in
accordance with the requirements of Regulation 14E under the
Exchange Act to the extent applicable. Accordingly, the US Tender
Offer will be subject to disclosure and other procedural
requirements, including with respect to withdrawal rights, offer
timetable, settlement procedures and timing of payments that are
different from those applicable under US domestic tender offer
procedures and law.
Certain information in this announcement is based on management
estimates. By their nature, estimates may not be correct or
complete. Accordingly, no representation or warranty (express or
implied) is given that such estimates are correct or complete or
founded on reasonable grounds. No representation or warranty
(express or implied) is given that such estimates are founded on
reasonable grounds. Zegona does not undertake any obligation to
correct or complete any estimate whether as a result of being aware
of information (new or otherwise), future events or otherwise.
Cautionary Note Regarding Forward-Looking Information
This announcement includes statements that are, or may be deemed
to be, "forward-looking statements". These forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "believes", "estimates",
"envisages", "plans", "anticipates", "targets", "aims",
"continues", "expects", "intends", "hopes", "may", "will", "would",
"could" or "should" or, in each case, their negative or other
variations or comparable terminology. These forward-looking
statements include matters that are not facts. By their nature,
forward-looking statements involve risk and uncertainty because
they relate to future events and circumstances. A number of factors
could cause actual results and developments to differ materially
from those expressed or implied by the forward-looking statements,
including, without limitation changing business or other market
conditions and general economic conditions. These and other factors
could adversely affect the outcome and financial effects of the
plans and events described in this announcement. Forward-looking
statements contained in this announcement based on past trends or
activities should not be taken as a representation that such trends
or activities will continue in the future. Subject to any
requirement under the Listing Rules, Prospectus Regulation Rules,
the Disclosure Guidance and Transparency Rules or other applicable
legislation or regulation, Zegona does not undertake any obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. Investors
should not place undue reliance on forward-looking statements,
which speak only as of the date of this announcement.
[1] GBP329,306,778
[2] GBP329,306,778
[3] Adjusted to remove the non-current tax receivable of GBP4.4
million which is dependent on a successful appeal by Zegona in
respect of the tax paid by Zegona to HMRC on 4 March 2021 relating
to the UK's Controlled Foreign Company legislation and the European
Commission's decision in 2019 that the associated Group Financing
Exemption was an aid scheme and amounted to illegal state aid (as
disclosed in Zegona's accounts for the year ended 31 December
2020).
[4] 218,970,076 shares
[5] The subscription price for Zegona management's agreed
re-investment into the business post the Tender Offer will be the
adjusted Net Asset Value per Share immediately prior to completion
of the subscription. The adjusted Net Asset Value will be
calculated post the Tender Offer of GBP329.3 million, with no
provisions being made for any potential value being received from
the non-current tax receivable and no provisions for the
termination costs of any contracts or other future potential
liabilities.
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END
TENFFFEFTIIFLIL
(END) Dow Jones Newswires
August 13, 2021 02:00 ET (06:00 GMT)
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