French incumbent Orange will not raise its €3.4bn (US$4.4bn) takeover bid for Spanish fixed-line operator Jazztel, its CEO Stephane Richard reportedly told local media.
In an interview with El Pais newspaper on Sunday, Richard was quoted as saying…
French incumbent Orange will not raise its €3.4bn (US$4.4bn) takeover bid for Spanish fixed-line operator Jazztel, its CEO Stephane Richard reportedly told local media.
In an interview with El Pais newspaper on Sunday, Richard was quoted as saying that the offer is very attractive for Jazztel’s shareholders, representing a 67% premium on its market cap at the end of 2013.
He reportedly added that the price is also high in terms of EBITDA multiple, pointing out that the entire amount would be paid in cash.
Orange first announced its intention to acquire Jazztel on 16 September, offering €13 per share in cash for 100% of Jazztel, which represented a 34% premium on the volume-weighted average closing price over the previous 30 trading days.
The offer valued Madrid-listed Jazztel at 8.6 times its projected 2015 EBITDA, taking expected synergies into account, Orange said at the time.
However, some of Jazztel’s shareholders rejected its offer saying that it undervalued the company.
At the time, analysts saw Orange’s bid as partly a response to Vodafone’s acquisition of Spanish cableco Ono for €7.2bn in July.
Paris-based Orange, which expects to close the deal by the first half of 2015, is Spain’s third largest mobile operator in a market dominated by Telefonica’s Movistar and Vodafone.
In recent years, the fourth largest player, TeliaSonera-controlled Yoigo, has attracted interest from a number of potential buyers, including Orange.
However, Richard was quoted as saying on Sunday that Yoigo was not a priority for the company, adding that it would first focus on closing a deal with Jazztel and later on integrating the acquired business.
