Private equity firm Kohlberg Kravis Roberts (KKR) will offer the minority shareholders of German alternative operator Versatel E6.87 a share, as part of its announced acquisition of the company, reports Dow Jones.
The newswire explains that the share…
Private equity firm Kohlberg Kravis Roberts (KKR) will offer the minority shareholders of German alternative operator Versatel E6.87 a share, as part of its announced acquisition of the company, reports Dow Jones.
The newswire explains that the share price is based on Versatel’s volume-weighted average domestic stock exchange price during the three months to 19 May, when the takeover was announced.
About a week ago, KKR launched a public takeover offer to the shareholders of Versatel, having previously agreed a separate deal with the company’s three largest shareholding groups.
Public shareholders will be able to sell their shares for a minimum of E6.70 in cash, with the price based on the amount of the volume weighted average stock exchange price of the Versatel share during the last three months.
Prior to the 19 May announcement, KKR had agreed another deal with Versatel’s main shareholders, which own a collective 92% of the company: German broadband business United Internet (which owns a 25.2% in Versatel), as well as private equity groups Apax (41.7%) and Cyrte Investments (25%).
Under that separate binding agreement, each of those groups will sell their shares at E5.50 apiece, 22% less than the deal being offered to public shareholders by Victoria Fibre Holding, a vehicle controlled by KKR.
A spokesperson for KKR explained that the purpose of these two separate agreements was to allow United Internet to support the company going private now, to exert some continued influence once that takes place, and to keep its ownership options open for the future.
For the 2010 financial year, Versatel, which operates a fibre network, recorded a turnover of E725m, which it said makes it the country’s third largest alternative provider.
Apax bought its stake in 2005, while Cyrte increased its own stake in 2008.
Pending approval by the German Financial Supervisory Authority, BaFin, and the cartel office, the transaction is expected to close in H2.
Versatel was advised by BoA Merrill Lynch and Latham & Watkins, while KKR was advised by HSBC and Hengeler & Mueller. United Internet declined to name its own advisers. Apax and Cyrte were not reached before press time.
