Tele2 announces USD350m rights issue related to TDC Sweden takeover

5 Oct 2016

The Board of Directors of Swedish telecoms group Tele2 have approved a rights issue of approximately SEK3 billion (USD350 million) with preferential rights for existing shareholders, in relation to the recently agreed acquisition of B2B operator TDC Sweden. The largest shareholder in Tele2, Kinnevik (representing 30.34% of total equity and 47.92% of voting shares as of 31 August 2016) has committed to subscribe for its pro rata share of the rights issue, and Nordea Bank has entered into a standby underwriting commitment for the remaining portion of the rights issue, which is expected to commence shortly after approval at an Extraordinary General Meeting on 27 October 2016.

On 21 June 2016 Tele2 signed a contract to acquire 100% of TDC Sweden, subject to regulatory approval by the relevant competition authorities, for SEK2.9 billion on a cash and debt free basis. Tele2 estimates annualised run-rate OPEX and CAPEX synergies from the merger to amount to approximately SEK300 million, with additional one-off CAPEX synergies estimated to amount to SEK200 million. Tele2 also expects positive effects from cross-selling (which are not included in the above synergy estimates). The company estimates the integration costs and other one-off costs required to achieve synergies to amount to approximately SEK750 million. The acquisition of TDC Sweden is not conditional upon equity financing as Tele2 has available funds and existing credit facilities in place to finance the acquisition, although in conjunction with the takeover announcement Tele2 also communicated the intention to undertake an equity issue with preferential rights for existing shareholders to maintain financial strength.

Sweden,Tele2, Tele2 Sweden, TDC Sverige,

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