Business
Zegona Sells Telecable to Euskaltel
Zegona Sells Telecable to Euskaltel.
About this update from Zegona Communications Plc
[{"type":"text","content":"\n \nRNS Number : 2070F Zegona Communications PLC 16 May 2017 \n\nZEGONA COMMUNICATIONS PLC\n \n \nZegona sells Telecable for total value of Up to €701m1,2\n \nLondon, England, 16th May 2017 - Zegona Communications PLC announces the sale of Telecable, \nits Spanish Cable business, to Euskaltel\n \n \nAttractive valuation for Telecable:\n· Euskaltel is acquiring Telecable for a total value of up to €701m1,2, comprising an Enterprise Value of €686m and up to €15m deferred payment\n· The Enterprise Value consideration includes €186.5m cash3 and 26.8m shares in Euskaltel (15% ownership)\n· Transaction values Telecable at 10.8x EBITDA and 17.7x Cash Flow4\n \nSubstantial value creation for Zegona shareholders:\n· Transaction values Telecable at an implied Zegona share price of £1.995\n· 64% premium to Zegona's undisturbed share price6 and 41% premium to Zegona's current share price7\n· 42% total shareholder return versus initial investment by Zegona shareholders8\n \nTransaction structure provides opportunity for additional shareholder value:\n· The combined business creates the leading integrated telecommunications operator in the North of Spain, with enhanced scale and exceptional cash generation (€711m Revenues, €346m EBITDA, €224m Cash Flow9)\n· Substantial synergies, valued by Euskaltel at €245m, equivalent to €1.37 per share in the combined business\n· Zegona will have significant influence in Euskaltel through its Board representation10 and a newly created Strategy Committee\n· Opportunity to close shareholder value gap - Euskaltel trades at a discount to many of its industry peers11\n \nSignificant capital returns for Zegona shareholders:\n· The transaction will generate significant up-front cash proceeds and we intend to return excess cash to shareholders quickly and tax efficiently\n· Transaction allows Zegona to maintain its dividend policy (5p per share for 2017)\n· Zegona's ownership in Euskal...