Business
Zegona Terminates Yoigo Negotiations
Zegona Terminates Yoigo Negotiations.
About this update from Zegona Communications Plc
[{"type":"text","content":"\n \nRNS Number : 8875B Zegona Communications PLC 22 June 2016 \n\nNOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, TO US PERSONS OR IN OR INTO THE UNITED STATES, OR INTO OR FROM CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR AUSTRALIA.\n \nFor release 7 a.m. on 22 June 2016\n \nZegona Communications plc\n \nZegona Terminates Yoigo Negotiations\n \nFollowing our announcement earlier this week and the subsequent news that MASMOVIL has signed an agreement to acquire 100% of the shares of Xfera Móviles S.A. ('Yoigo'), the Zegona Board confirms that it has terminated all discussions on the Yoigo transaction with immediate effect.\n \nThe Yoigo transaction was complex. As communicated earlier this week, any Yoigo transaction required the agreement of all four shareholders individually and in aggregate. Zegona conducted significant due diligence, had 100% underwritten financing and reached agreement with TeliaSonera within the original exclusivity period. TeliaSonera also provided assurances that it would take all reasonable actions to gain agreement from Yoigo's minority shareholders and extended the exclusivity period several times to facilitate this objective. However, negotiations with Yoigo's minority shareholders1 were protracted and ultimately inconclusive. \n \nZegona has a disciplined approach to valuation. It is our understanding that MASMOVIL has agreed an equity value at least 35% higher2 than Zegona's offer. Zegona's valuation was based on significant synergies with Telecable, but also reflected several challenges within the Yoigo business. While we had developed robust solutions for each of these challenges, ultimately we were only prepared to acquire Yoigo at the right price given our disciplined valuation approach and focus on shareholder returns.\n \nZegona disengaging to focus on other opportunities. Although the MASMOVIL transaction is still dependent upon its ability to secure significant debt and equity financing, the Zegona Board considers that it is in the best interest of shareholders that we disengage to focus on other opportunities. As we look across the broader European TMT landscape, we see many attractive targets for additional acquisitions and we will evaluate those transactions which satisfy our ...