Morgan Stanley Infrastructure Partners makes offer for Tele Columbus

21 Dec 2020

Kublai, an affiliate of funds advised by Morgan Stanley Infrastructure, has announced a voluntary public takeover offer of German cable operator Tele Columbus (PYUR) at a price of EUR3.25 (USD3.98) per share. Existing shareholder United Internet has agreed to contribute its indirect stake of approximately 29.9% in Tele Columbus to Kublai if the takeover offer is successful. Rocket Internet, which holds around 13.36% of the shares in Tele Columbus, also supports the takeover offer and signed an irrevocable commitment to tender its shares into the offer. Tele Columbus says the transaction will enable it to deliver on its planned expansion of its fibre-based infrastructure in the interest of customers and partners, make the company more sustainable in the future and thus secure jobs. The acceptance period of the offer is six weeks and the takeover offer is expected to close in the second quarter of 2021, subject to regulatory approvals and a minimum acceptance threshold of 50%.

At an Extraordinary General Meeting on 20 January 2021, a capital increase through a Rights Offering in the amount of EUR475 million and an authorised capital are to be resolved. Kublai has guaranteed the amount of the capital increase in the Investment Agreement subject to successful completion of the offer. Subject to the subscription rights of other shareholders, Kublai will subscribe for enough shares to ensure that the amount of EUR475 million will be reached in any case, and it has also agreed to provide further equity of up to EUR75 million in the future for the implementation of the ‘Fiber Champion’ strategy. Over the next ten years, Tele Columbus plans to invest almost EUR2 billion in network infrastructure and fibre expansion. Currently, 2.4 million households are connected to Tele Columbus’ broadband network and by 2030 around two million homes will be supplied with gigabit bandwidths via fibre-optic networks.

In addition, Tele Columbus has signed a binding pre-contract to enable 1&1 Drillisch to use its fibre network for the marketing of the firm’s own broadband products. The wholesale pre-contract is subject to the successful execution of the takeover offer. A wholesale agreement with Telefonica Deutschland has been in force since October 2019 and is currently being implemented.

Germany, 1&1 Drillisch, Tele Columbus Group (PYUR)