BUSINESS

Orange agrees to buy Spain’s Jazztel for €3.4 billion

Friendly takeover bid depends on willingness of majority of operator’s shareholders to sell

Jazztel CEO José Miguel García (l) and chairman Leopoldo Fernández Pujals.
Jazztel CEO José Miguel García (l) and chairman Leopoldo Fernández Pujals.AP

French telecommunications firm Orange has announced its wish to acquire Spanish operator Jazztel for around €3.4 billion in cash.

The announcement comes just two months after Vodafone closed its purchase of Spanish cable provider Ono for €7 billion.

The French group is offering €13 a share, an 8% premium over the price at which Jazztel was trading when its shares were suspended on Monday.

Leopoldo Fernández Pujals, Jazztel chairman and majority shareholder with a stake of 14.48%, has pledged to accept the friendly takeover. However, the bid has to be greenlighted by over 50.01% of the capital, excluding Pujals’ stake.

Orange is conditioning the purchase on Jazztel not buying Yoigo, Spain’s fourth-biggest cellphone operator

Orange is also conditioning the purchase on Jazztel not buying Yoigo, Spain’s fourth-biggest cellphone operator.

The French company will finance the transaction with a capital increase of up to €2 billion and the issue of hybrid bonds.

The synergies would produce savings of around €1.3 billion, Orange said.

The French group had been pondering new acquisitions in Spain for some time after buying Ya.com, a unit of Deutsche Telekom. Earlier this month, financial director Federico Colom stated that his company was ready to participate in any takeover of Jazztel or Yoigo “as long as they are put up for sale.”

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