Tele2 put the final pieces in place for a previously announced rights issue that is designed to cover the operator’s recent acquisition of TDC Sweden by raising close to SEK3 billion (€304 million/$332 million), which would cover the SEK2.9 billion sales tag.
Tele2 said it expected to close the acquisition of TDC Sweden by the end of October. The European Commission (EC) has already given the green light to the takeover. The Sweden-based operator said at the time that it would conduct a rights issue to existing shareholders to cover the cost of the acquisition.
Tele2 did point out that the purchase of TDC Sweden is not conditional upon equity financing as it has available funds and existing credit facilities in place, but it decided to carry out the rights issue to maintain the company’s financial strength.
The operator gained shareholder approval for the rights issue on Oct. 27 and has now published the prospectus, indicating that the process should be concluded by around Nov. 23.
It intends to issue new shares, with preferential rights for existing shareholders, at a price of SEK53 per share. The subscription period is expected to run from Nov. 2 to Nov. 16 inclusively.
Acquiring its rival will beef up Tele2’s capabilities in the business-to-business sector in Sweden, while also providing a welcome boost to the operator’s balance sheet. In a statement announcing the EC’s decision, Tele2 explained that TDC Sweden provides end-to-end communication services to a number of public sector and blue chip companies in the country, and has a solid track record in terms of profitability.
TDC Sweden delivered net sales of SEK3.4 billion and EBITDA of SEK0.4 billion in 2015, Tele2 stated.
Allison Kirkby, president and CEO of Tele2, previously said that the company is pleased to have received the go-ahead from the EC.
“This acquisition is consistent with our strategy to be champions of customer value for both consumers and businesses, allowing us to serve our large B2B customers with a stronger and wider range of communication and network services,” she said.