Tele Columbus recommends shareholders accept Kublai’s offer in reasoned statement published today
– Management Board and Supervisory Board of Tele Columbus recommend accepting the offer of Kublai GmbH after thorough review of offer document and on basis of independent fairness opinions
– Offer price reviewed in line with any standard market valuation methods and assessed as fair and adequate; conducting of competitive bidding process additionally proves adequacy of offer compensation
– Offer document published on 1 February 2021; six-week acceptance period ends on 15 March 2021
– Offer subject to minimum acceptance threshold of 50 percent – in case of non-achievement, transaction and related Rights Offering resolved on 20 January 2021 cannot be executed
– Bidder supports Fiber Champion strategy which, in view of Management Board and Supervisory Board, will enable Tele Columbus to sustainably secure its competitiveness
– Implementation of Fiber Champion strategy requires substantial investments that cannot be financed from cash flow alone. Taking out further loans not possible given the company’s high level of debt
– Without a successful closing of the transaction, Fiber Champion strategy cannot be implemented and debt cannot be reduced, which would probably result in a negative share price development
Berlin, 8 February 2021. In the reasoned statement published today, the Management Board and Supervisory Board of Tele Columbus AG (ISIN: DE000TCAG172, WKN: TCAG17) recommend that shareholders of the company accept the voluntary public takeover offer of Kublai GmbH and to tender their shares. Kublai is a bidding company backed by Morgan Stanley Infrastructure. United Internet has agreed to contribute its indirect stake of approximately 29.90 percent in Tele Columbus to the bidder if the takeover offer is successful. Furthermore, Rocket Internet has contractually committed to tender its stake of approximately 13.36 percent in Tele Columbus to the bidder.
The Management Board and the Supervisory Board have thoroughly reviewed the offer document published by the bidder on 1 February 2021 and have come to the conclusion that the acquisition of Tele Columbus by the bidder is in the best interest of the company, its shareholders, creditors, employees and other stakeholders.
To this end, the Management Board and the Supervisory Board have reviewed the consideration offered by the bidder for the Tele Columbus shares for adequacy using all standard market valuation methods and assessed it as fair and adequate. This is also confirmed by the fairness opinions obtained by Value Trust and Rothschild from the Management Board and the Supervisory Board, respectively. Members of the Supervisory Board who hold functions at United Internet or its group companies have abstained from voting on this opinion as a precautionary measure in order to avoid possible conflicts of interest. The Management Board and the Supervisory Board welcome that the Group Works Council, based on the information available to it, supports the intended takeover of the majority of shares by the bidder/Morgan Stanley Infrastructure Partners. All members of the Management Board and Supervisory Board will accept the offer of the bidder with all Tele Columbus shares held by each of them.
“After independent review of the offer document by the Management Board and the Supervisory Board, both bodies consider the offer price to be fair and adequate. Based on the fair offer price and the guaranteed equity injection of up to EUR 550 million, we are convinced that the acquisition of Tele Columbus by the bidder is in the best interest of the company, its shareholders, creditors, employees and other stakeholders. The offer will allow us to implement our Fiber Champion strategy and to reduce our debt. For our shareholders, it provides an opportunity to sell their shares at a fair and adequate price. They now have time until 15 March 2021, subject to an extension of the acceptance period, to tender their shares”, says Dr. Daniel Ritz, Chief Executive Officer (CEO) of Tele Columbus AG.
The offer and the conclusion of the Investment Agreement were preceded by a competitive bidding process in the course of which Tele Columbus approached potential investors. At the end of the process, the company negotiated an Investment Agreement with Morgan Stanley Infrastructure Partners, which was signed on 21 December 2020. At the same time, negotiations took place between Morgan Stanley Infrastructure Partners and United Internet, which resulted in the signing of the Shareholders’ Agreement subject to the closing of the takeover offer and the Transaction Agreement. On 21 December 2020, the public takeover offer by Kublai GmbH was announced. The Management Board and the Supervisory Board consider the conduct of the competitive bidding process preceding the offer to be another factor that confirms the adequacy of the offer consideration.
The bidder supports the Fiber Champion strategy which, in the view of the Management Board and Supervisory Board, will enable Tele Columbus to sustainably secure its competitiveness. The implementation of the strategy requires substantial investments that the company cannot finance from cash flow alone. Taking out further loans is not possible given the company’s high level of debt. The bidder has guaranteed to inject up to EUR 550 million in equity capital if the takeover offer is successful, in order to reduce the debt level and to finance the investments in the fiber roll-out. In the view of the Management Board and the Supervisory Board, other financing options are not realistic, in particular the option that the required equity capital can be fully provided by the shareholders in the short term.
The offer is subject to a minimum acceptance threshold of 50 percent. If this is not reached, the transaction cannot be executed and the Rights Offering resolved at the Extraordinary General Meeting on 20 January 2021 cannot be carried out. Without a successful closing of the transaction, the Fiber Champion strategy cannot be implemented, which in the view of the Management Board and Supervisory Board would probably result in a negative share price development.
Shareholders can accept the offer since the publication of the offer document on 1 February 2021. The acceptance period is six weeks and ends (subject to an extension) on 15 March 2021. In addition to the minimum acceptance threshold of 50 percent, the offer is subject to a sufficient number of waivers of termination rights by bondholders and creditors due to a change of control as well as regulatory approvals. Closing of the takeover offer is expected in the second quarter of 2021.
About Tele Columbus
Tele Columbus AG is one of Germany’s leading fibre network operators, which reaches more than three million homes. Through its brand PŸUR, the Company offers high-speed internet including telephony and more than 250 TV channels on a digital entertainment platform that combines linear TV with video on demand entertainment. To its housing as-sociation partners the Tele Columbus Group offers tailored models of cooperation and state-of-the-art services such as telemetric and tenant portals. As a full-service partner for municipalities and regional utilities, the Company is actively supporting the fibre-based infrastructure and broadband internet expansion in Germany. For its business customers, the Group offers carrier services and corporate solutions on its proprietary fibre network. Besides its headquarter in Berlin, the Company has locations in Hamburg, Leipzig, Ratingen and Unterföhring. Since January 2015, Tele Columbus AG is listed on the regulated market (Prime Standard) of the Frankfurt Stock exchange.
This release may contain forward-looking statements. These statements reflect the Company’s current knowledge and expectations and projections about future events. By their nature, forward-looking statements involve a number of risks, uncertainties, assumptions and other factors that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Such risks, uncertainties and assumptions may cause our actual results, performance or achievements to differ materially from those expressed or implied by such forward-looking statements. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this release may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.
All information contained in this release has been carefully prepared. However, no reliance may be placed for any purposes whatsoever on the information contained in this document or on its completeness.
This release does not constitute or form part of, and should not be construed as, and offered to sell or issue, or the solicitation of an offer to purchase, subscribe to or acquire, securities of the Company, or an inducement to enter into investment activity in the United States. No part of this release, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever.