UK-based investment firm Zegona Communications has cancelled its proposed partial tender offer for 14.9% of Spanish cableco Euskaltel, as tabled in October 2018, citing a ‘deterioration in equity market conditions’. The EUR7.75 (USD8.92) per share offer would have seen Zegona increase its stake in Euskaltel from 15.0% to 29.9%.
Instead, Zegona says that it has agreed terms for a shareholder relationship with Talomon Capital, which is a shareholder of both Zegona and Euskaltel. Zegona says that this deal increases its ‘confidence in its ability to engage positively with Euskaltel with materially increased influence’. Under the shareholder relationship agreement, Talomon would have an ownership entitlement of up to 2.4% of Euskaltel. Going forward, Zegona seeks to increase its ownership of Euskaltel through market purchases at a price it considers attractive for its shareholders; the company will raise new equity for these proposed market purchases via a ‘non-pre-emptive institutional placing’.
Zegona – which acquired its stake in the regional cableco following the EUR701 million sale of Telecable de Asturias to Euskaltel in July 2017 – was established in 2015 with the objective of acquiring businesses in the European telecoms, media and technology sectors and using a ‘Buy-Fix-Sell’ strategy to deliver attractive shareholder returns.