Sunday, 05 July 2020

Equity firms set to buy MasMovil for $3.3bn

by Harry Baldock, Total Telecom
Tuesday 02 June 20

The deal would be one of the largest of its kind to go ahead since the beginning of the coronavirus pandemic

Yesterday it was announced that Masmovil is set to be acquired by a trio of private equity firms: Providence Equity Partners, Cinven, and KKR. The announced deal values the Spanish operator at around $3.3 billion, making the deal, if it does go ahead, one of the largest to take place during the coronavirus pandemic…

Yesterday it was announced that Masmovil is set to be acquired by a trio of private equity firms: Providence Equity Partners, Cinven, and KKR. The announced deal values the Spanish operator at around $3.3 billion, making the deal, if it does go ahead, one of the largest to take place during the coronavirus pandemic.
 
Talks surrounding the deal had reportedly already begun at the start of the year, but were delayed by the onset of the coronavirus pandemic, as the buyers waited to see how MasMovil performed.
 
All three firms will hold an equal stake in MasMovil if the deal proceeds.
 
Providence currently already holds a 9.16% stake in MasMovil. The company has a long history in the Spanish telecoms sector, having previously held a stake in Ono, which was the country’s largest cable operator when it was sold to Vodafone in 2014 for around $10 billion.
 
KKR is also increasing its activities in the telecoms sector in recent years. The company acquired a 40% stake in Telefonica’s Telxius in 2017, also purchasing Hyperoptic in the UK in 2019. Earlier this year, they sold German fibre company Deutsche Glasfaser.
 
MasMovil likely appears an appealing investment due to its ability to hold its own in the hyper-competitive Spanish market, with the operator steadily consolidating smaller brands in the last few years, including Yoigo, Lyca, and Lebara.
 
The announcement of this deal also raises the possibility that other Spanish telcos may move in to offer larger bids for control of MasMovil, which could offer them a wide range of potential synergies. However, Providence has already stated that it would oppose such bids.
 
The proposed deal must be accepted by at least 50% of the company’s shareholders before it can go ahead. 
 
In the same market, Euskaltel recently launched a new service under the Virgin brand, expanding its operations across the country. 
 
 
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