Telefonica SA TEF-Agreement with Liberty Global (2543M)
May 07 2020 - 3:38AM
UK Regulatory
TIDM0TDE
RNS Number : 2543M
Telefonica SA
07 May 2020
TELEFÓNICA, S.A. ("Telefónica") in compliance with the
Securities Market legislation, hereby communicates the
following:
INSIDE INFORMATION
Telefónica informs that it has reached an agreement with Liberty
Global plc to combine into a 50-50 joint venture (JV) their
operating businesses in the UK (O2 Holdings Ltd. and Virgin Media
UK, respectively) to create an integrated communications provider
in the UK with over 46 million video, broadband and mobile
subscribers and approximately GBP11billion of revenue.
The combined entity will be a stronger fixed and mobile player
in the UK market and will benefit from the scale and complementary
expertise of each partner, who will provide a suite of services to
the JV after closing.
The transaction will deliver significant value, with sizeable
and highly visible synergies of GBP6.2bn on a net present value
basis after integration costs, capex and revenue benefits of GBP540
million on an annual basis by the fifth full year post closing, and
free cash flow accretive since year one for Telefónica, that
expects to receive GBP5.7bn of proceeds in total after an
equalization payment to Telefónica of GBP2.5 billion.
The JV will target leverage of between 4x and 5x OIBDA. This
move is fully aligned with the New Telefonica strategy to focus and
improve market positioning in its core markets.
The parties have agreed to restriction the transfer of interests
in the JV to a third party until the fifth anniversary of closing,
when it will be subject to a right of first offer in favour of the
other shareholder.
The transaction is subject to regulatory approvals, consummation
of the recapitalizations and other customary closing
conditions.
Please see attached press release.
http://www.rns-pdf.londonstockexchange.com/rns/2543M_1-2020-5-7.pdf
Madrid, 7 May 2020.
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END
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