TMCnet News
Orange To Launch Offer To Buy Spain's Jazztel For About 3.4 Bln Euros In Cash(dpa-AFX International Compact Via Acquire Media NewsEdge) PARIS (dpa-AFX) - French telecom major Orange SA (ORAN), previously known as France Telecom, said Monday it will launch a friendly voluntary tender offer to acquire Spanish broadband provider Jazztel Plc (JAZTF) for 13 euros per share or about 3.4 billion euros or $4.3 billion in cash. The proposed deal will create the second largest fixed-line broadband operator and one of the major players in the mobile segment in Spain that will enable the combined entity to provide convergent offers to its customers. The offer price represents a 34 percent premium over Jazztel's average closing price in the last 30 trading days. The deal will also enable Orange to accelerate its growth in the highly-competitive Spanish telecom market, where it faces increasing price competition from rivals such as Telefonica SA (TEF, TDE.L) and Spanish cable operator Grupo Corporativo Ono SA, which was recently acquired by British telecom giant Vodafone Group plc (VOD, VOD.L). The deal is expected to generate estimated global synergies for the combined entity of up to 1.3 billion euros, primarily due to savings in operational expenditure and investments in networks. Jazztel currently uses the Orange network to provide its mobile service. The closure of the deal is primarily is subject to approval by at least 50.01 percent of Jazztel shareholders, excluding the 14.5 percent of the shares that Chairman Leopoldo Fernandez Pujals, which he has agreed to sell. Additionally, CEO José Miguel Garcia Fernandez, and General Secretary José Ortiz Martinez have also agreed to sell their stakes. Paris-based Orange intends to finance the deal with a combination of perpetual subordinated hybrid bonds and a capital increase of up to 2 billion euros by selling shares. However, the cash tender offer is not conditional upon the obtention of financing. The offer is also reportedly subject to the shelving of Jazztel's talks with Swedish telecommunications firm TeliaSonera AB (TLSNY) over a possible offer for its Spanish operations Yoigo. Jazztel confirmed the initial talks on Thursday, but no offer is made to date. Jazztel is a major player on the Spanish telecom market and is one of the most dynamic competitors in the triple play and mobile services segments. ORAN closed Monday's regular trading session at $14.85, down $0.26 or 1.72%. on a volume of 0.84 million shares. Its shares closed in Paris at 11.45 euros, down 0.23 euros or 1.93% on a volume of 8.79 million shares. Meanwhile, Jazztel closed in Madrid at 12.05 euros, up 1.35 euros or 12.57% on a volume of 6.63 million shares. Copyright RTT News/dpa-AFX |