German cable operator Tele Columbus has received a takeover offer from Kublai, a company sponsored by Morgan Stanley Infrastructure, at EUR 3.25 per share. The price represents a premium of 37.5 percent on the three months average price of the Tele Columbus share on 18 December, and a premium of 41.3 percent on the share price on the day before the invitation to the Annual General Meeting. Reuters estimates the full transaction at over EUR 400 million.
The management and the supervisory boards of Tele Columbus welcome the takeover offer and intend to recommend that shareholders accept it. United Internet, the largest shareholder in Tele Columbus with 29.9 percent, also welcomed the takeover offer. In return, United Internet will receive a shareholding in the bidding company. Rocket Internet, which holds around 13.36 percent stake in Tele Columbus, has signed an irrevocable obligation to tender the offer.
The bidder supports the existing management of Tele Columbus. The acceptance period for the offer is six weeks. The takeover offer is expected to be completed in the second quarter, subject to regulatory approvals.
With this transaction, and the supports of the companies, Tele Columbus can implement the expansion of the fibre-optic infrastructure. At the extraordinary general shareholders meeting (EGM) on 20 January, the company will propose a capital increase of EUR 475 million to support the so-called fibre champion strategy. The bidder company has agreed to provide additional equity of up to EUR 75 million for the implementation of the strategy. United Internet will also participate on a pro rata basis. Tele Columbus plans to invest almost EUR 2 billion in network infrastructure and fibre-optic expansion in the next ten years. Around 2 million households will be supplied with gigabit bandwidths via fibre-optics by 2030.
One part of the strategy is to open up the broadband network for wholesale partners. For this reason, Tele Columbus has signed a binding preliminary agreement with 1&1 Drillisch. Under the agreement, 1&1 will be able to to use Tele Columbus fibre-optic network as a pre-service for its broadband products. The preliminary agreement is subject to the successful conclusion of the takeover offer. The transaction aims to significantly reduce Tele Columbus' net debt.
