Spain’s telecoms giant Telefonica has issued €1.5bn (US$1.94bn) worth of convertible notes to finance part of its takeover of German mobile operator E-Plus.
The three-year notes, which can be converted into new and existing shares, carry a fixed…
Spain’s telecoms giant Telefonica has issued €1.5bn (US$1.94bn) worth of convertible notes to finance part of its takeover of German mobile operator E-Plus.
The three-year notes, which can be converted into new and existing shares, carry a fixed interest rate of 4.9% and will mature in September 2017. They priced at par.
BofA Merrill Lynch, Goldman Sachs, Morgan Stanley and UBS acted as joint lead managers and bookrunners.
The minimum conversion price has been set at €11.9 per share while the maximum conversion price is €14.5775, resulting in a premium equal to 22.5% over the minimum conversion price.
Proceeds from the issue will be used to finance Telefonica’s €8.6bn (US$11.34bn) acquisition of E-Plus from Dutch telco KPN.
KPN is selling its German mobile unit for €5bn in cash and a 20.5% stake in the combined E-Plus/Telefonica Deutschland (O2) entity.
Of those €5bn, around €3.6bn will be financed through an O2 rights issue.
Last month, the European Commission unconditionally approved the deal, which was initially cleared on 2 July subject to conditions to boost the competitiveness of German MVNOs.
