Mobile operator Telefonica Deutschland (O2) has finalised its rights issue to part-fund its acquisition of rival E-Plus, raising about €3.6bn (US$4.6bn).
The company said the transaction generated high demand from investors, with the subscription rate…
Mobile operator Telefonica Deutschland (O2) has finalised its rights issue to part-fund its acquisition of rival E-Plus, raising about €3.6bn (US$4.6bn).
The company said the transaction generated high demand from investors, with the subscription rate for the new shares reaching 99.92%.
Overall, it sold over 1.11 billion shares at €3.24 each. The 77% Telefonica-owned subsidiary gave shareholders the right to buy one new share for each existing share they already owned.
Citigroup, HSBC, Morgan Stanley and UBS were joint global coordinators. BofA Merrill Lynch and JP Morgan acted joint bookrunners, while Santander, Bayerische Landesbank, BBVA, BNP Paribas, Commerzbank, Mediobanca and Unicredit were joint co-leads.
The consortium of banks will assume all the shares that have not been allotted or purchased.
Dutch telco KPN is selling E-Plus to Telefonica’s German subsidiary for €5bn in cash and a 20.5% stake in the new combined entity.
Upon completion of the transaction, KPN will transfer 100% of shares in E-Plus to O2 for a consideration made up of €3.6bn in cash – from the rights issue – and newly-issued shares in O2, some of it will be bought back by Telefonica for around €1.4bn using convertible notes.
KPN’s remaining 20.5% stake in O2 will be subject to a lock-up period of 180 days.
O2 said in early September that it will issue an additional 740.7 million new shares to fulfil the stock-based element of the purchase price.
At the end of August, the European Commission rubber-stamped the deal after a lengthy regulatory review. The companies had originally agreed the merger in July 2013.
