The French operator Orange has given a boost to the consolidation of the European telecoms sector, unveiling a friendly takeover offer from Spanish operator Jazztel, for a total of 3.4 billion, which should enable it to strengthen in a highly competitive market. If this offer, which was to be filed Tuesday morning, found success, the group expects synergies of 1.3 billion euros, he said Monday night during a conference call.
The deal would create the second Spanish operator in the fixed broadband and mobile telephony in the third. This offer should allow Orange d “accelerate the shift to convergence in the Spanish market” and “brings the two most dynamic players in the sector (…) that produce a true growth potential “, said the head of the French group, Stéphane Richard.
The offer provides shareholders Jazztel € 13 per share in cash, or a” premium 34% of the weighted average closing price of the last thirty trading days “, and values Jazztel to € 3.4 billion, says Orange. To be finalized, it must be accepted by at least 50.01% of the free float of Jazztel and receive the green light from authorities.
The shareholder of Jazztel, Leopoldo Fernandez Pujals, s is committed to bringing its 14.5% stake in the offer, and the Director General of the operator Jose Miguel Garcia Fernandez and Jose Ortiz Martinez, general secretary, said the French operator, that Jazztel confirmed in a separate statement issued by the CNMV, the Spanish stock gendarme.
Develop fiber
Orange is already well established in Spain, its second largest market where he gets 10% of its turnover. He believes that this is “the right time to increase its influence in this market in the process of recovery,” while growth restarts in the country and the demand is high for the ultra-fast broadband, said Stéphane Richard . The operator wants to accelerate the development of the fiber in Spain and strengthen its position in the fixed. Orange believes that the new set unborn redeeming Jazztel, which would become the third player in the Spanish market in mobile telephony, could quickly granted second place. With this acquisition, Orange hopes to reach 1.3 billion euros of synergies through savings in operational costs and investments in network.
The French group expects to finance the transaction by an increase Capital “to a maximum of € 2 billion,” and hybrid bonds (form of financing midway between stocks and bonds). It also confirmed its financial targets for the current year. Orange is out of the woods after Jazztel came last week in negotiations with the Scandinavian group TeliaSonera to acquire the 76% that it holds in the fourth mobile operator in the Spanish market, Yoigo. This move was interpreted by many observers as a sign to Orange so that chaired by Stéphane Richard, who said he was also interested in Yoigo group take the lead. With this takeover, we can consider that Orange gives up its bid for Yoigo, said the leadership of the French group.
The European telecommunications market is undergoing a wave of consolidation particularly in Spain, with permission early July by the European Commission of the redemption of the Spanish cable operator Ono by British giant Vodafone mobile for € 7.2 billion.
The British group has already acquired Kabel Deutschland in 2013 while SFR is about to be built by Altice / Numericable in France. If Jazztel, established in 1998, is the fifth Spanish mobile operator behind the giant Movistar (Telefonica) and Vodafone, the provider of so-called triple-play services (telephony, television, internet) is well placed in the deployment of optical fiber. The company posted 1.5 million mobile customers and 1.5 million in broadband, with slightly more than 60,000 subscribers to the fiber. Jazztel has posted a net profit of 67.5 million euros last year (9%), for a turnover of one billion euros, up 15%.
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