Telecommunications, Media and Technology investor Zegona is selling its Spanish quad-play cable business Telecable to Euskaltel for a total value of up to €701 million, comprising an Enterprise Value of €686 million and up to €15 million deferred payment. The Enterprise Value consideration includes €186.5 million cash and 26.8 milion shares in Euskaltel (15 per cent ownership).

Zegona says the deal creates substantial value for its shareholders:

  • Transaction values Telecable at an implied Zegona share price of £1.995
  • 64 per cent premium to Zegona’s undisturbed share price6 and 41 per cent premium to Zegona’s current share price7
  • 42 per cent total shareholder return versus initial investment by Zegona shareholders
  • Zegona will have significant influence in Euskaltel through its Board representation and a newly created Strategy Committee.

“When we acquired Telecable in 2015, we identified the opportunity for substantial value creation through the combination of the three independent Northern Spanish Cablecos,” commented Eamonn O’Hare, Zegona’s Chairman and CEO. “This transaction turns our vision into reality, generates very attractive returns for our shareholders and provides the opportunity for significant additional value gain. We look forward to working closely with the Euskaltel Board and senior management team to help close the company’s current valuation gap and assist in defining the next exciting chapter of Euskaltel’s development.”

“We continue to see many attractive opportunities across the broader European TMT landscape and completing this transaction will allow us to bring increased focus to Zegona’s search for the next investment where we can again apply our proven ‘Buy-Fix-Sell’” strategy,” he added.

Zegona was established with the objective of acquiring businesses in the European Telecommunications, Media and Technology sector with a ‘Buy-Fix-Sell’ strategy to deliver attractive shareholder returns. Zegona is listed on The London Stock Exchange’s Main Market and is led by former Virgin Media executives, Eamonn O’Hare and Robert Samuelson.

Zegona acquired Telecable, the leading quad play cable telecommunications operator in the Asturias region of Spain in August 2015. In 2016, Telecable delivered Revenues of €138.5 million, EBITDA of €65.1 million and Cash Flow of €39.6 million.

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By Expat