Turnaround firm Zegona Communications (LSE:ZEG) has progressed from the London Stock Exchange’s junior AIM market to the main bourse following its acquisition of Telecable.
Turnaround firm Zegona Communications (LSE:ZEG) has progressed from the London Stock Exchange’s junior AIM market to the main bourse following its acquisition of Telecable.
Zegona’s directors believe the shift will allow the company “to increase its profile and attractiveness to a broader range of investors in advance of further acquisitions.”
Zegona’s first acquisition was Asturias, Spain-based Telecable, in a transaction worth €640m (US$705m). The vehicle, which has spoken of a longlist of around 70 potential purchases, is for now focusing its “buy-fix-sell” strategy on Telecable.
Zegona co-founder and CEO Eamonn O’Hare commented: “We are working closely with the team in Asturias to support the robust strategy already in place and to complement it with our knowledge and experience to further enhance the customer proposition and business performance.”
Market observers have for years predicted a three-way tie-up between Telecable and its northern Spanish regional cable counterparts Euskaltel and R Cable, which respectively operate in the Basque Country and Galicia. This summer, Euskaltel agreed to buy R Cable, valuing it at €1.12bn (US$1.27bn).
Zegona was formed earlier this year by O’Hare, CFO at Virgin Media prior to its takeover by Liberty Global, and Robert Samuelson, previously executive director of group strategy at Virgin Media. It raised an initial £30m (US$44m) equity in March and secured a further £251m (US$390m) from investors to part-finance the Telecable buy.
It launched with a manifesto to target investments that are “strategically sound businesses that require active change to realise full value”, with a view to creating a small portfolio of large assets with enterprise values from £1bn (US$1.5bn) to £3bn (US$4.6bn).
Zegona’s shares are trading at £160 per share, giving it a market capitalisation of £314m (US$476m). JP Morgan has been appointed Zegona’s sole corporate broker.