Tele Columbus (ETR:TC1) acquired fellow German cable operator Primacom less than a month ago but the company is already taking steps to prepare for its next purchase.
The third largest cableco intends actively to pursue the acquisition of other…
Tele Columbus (ETR:TC1) acquired fellow German cable operator Primacom less than a month ago but the company is already taking steps to prepare for its next purchase.
The third largest cableco intends actively to pursue the acquisition of other operators and has asked shareholders to approve a €240m capital increase to give it the flexibility to do so.
Pepcom, the next largest independent cableco, is reported to be in Tele Columbus’s sights and a pricetag of €700m has been reported for the Star Capital Partners-owned operator.
“The capital increase enables the company to continue its growth path in Europe’s most attractive cable market and to strengthen its position as the number three player in the German cable market,” Ronny Verhelst, CEO of Tele Columbus, said.
“We are confident that we will be able to make use of such additional potential in a way which creates value for both the company and its shareholders.”
Without the capital increase, the company said it was not currently able to make acquisitions given the current financing structure of the company. Shareholders will be asked at an EGM on 14 September to authorise the issuance of new shares.
Tele Columbus already has the option of a capital increase, on the condition that the proceeds primarily be used to refinance the Primacom acquisition bridge loan facility, meaning that only a small amount of the cash could be spent on further acquisitions.
If it does not spend the proceeds from a new capital increase on acquisitions, Tele Columbus said it may instead use it to repay debt.
The combination of Tele Columbus and Primacom created an operator with a footprint connecting 2.8 million homes, but the company remains dwarfed by rivals UnityMedia and Kabel Deutschland.
