Cinven, KKR, Providence aim for €3bn Masmovil deal

Alessia Argentieri
01 June 2020

Tweet
Facebook
LinkedIn
Google plus
Send to

Private equity firms Cinven, KKR and Providence Equity Partners have launched a bid to buy Madrid-listed telecoms company Masmovil for around €3bn.

The offer targets the entire share capital of Masmovil, composed of 131,714,565 shares, at a price of €22.5 per share, for a total amount of €2.96bn. The bid is conditional on acceptance from at least 50% of shareholders.

The offer was made via Lorca Telecom, a company equally owned by the three firms, via Providence's PEP VII and PEP VIII; Seventh Cinven Fund; and KKR Europe V.

Providence already owns a stake of 9.2% in Masmovil. Other shareholders include BlackRock, with a 5.4% stake; Onchena, a Spanish family office, with 13.3%; and Global Portfolio Investment, with 8.1%. The free float is equal to 52.7% of the share capital.

According to a statement, in the event that this offer is completed, Masmovil's board of directors has guaranteed continuity of the business strategy, and will keep employees and management team in place.

Masmovil hired Clifford Chance as legal adviser and Goldman Sachs International as M&A adviser for the sale process, while BNP Paribas is acting as financial and rating adviser. Morgan Stanley and Freshfields Bruckhaus Deringer were hired as advisers by the funds.

Barclays Bank, BNP Paribas and Morgan Stanley Bank International will provide financing for the acquisition.

Founded in 1997 and listed on the Spanish stock exchange in 2012, Masmovil is a telecommunications operator offering fixed-line, mobile and internet services to businesses and residential customers through its brands Yoigo, Masmovil, Pepephone, Llamaya and Lebara.

The company serves 8.9 million customers, of whom 1.5 million are fixed broadband and 7.4 million are mobile customers. Masmovil reported revenues of €1.7bn, EBITDA of €468m and net income of €93m in 2019. It expects to reach EBITDA of €570-600m in 2020 and €670-700m in 2021.

If successful, this bid will be the first take-private completed in Europe by a consortium of private equity firms after the coronavirus outbreak. Following the announcement, shares in Masmovil soared more than 20%, to €22.84.