Zegona Communications PLC MANAGEMENT INCREASES SHAREHOLDING IN ZEGONA TO 29% (9069F)
10 November 2022 - 6:01PM
UK Regulatory
TIDMZEG
RNS Number : 9069F
Zegona Communications PLC
10 November 2022
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DISTRIBUTION, PUBLICATION OR RELEASE WOULD BE UNLAWFUL.
ZEGONA COMMUNICATIONS PLC ("Zegona")
LEI: 213800ASI1VZL2ED4S65
10 November 2022
MANAGEMENT INCREASES ITS SHAREHOLDING IN ZEGONA TO 29%
In 2021, Zegona sold its investment in Euskaltel S.A.(1)
("Euskaltel") for EUR11.17 per share in cash. This valued
Euskaltel's equity at EUR2.0 billion, which equated to an
Enterprise Value of EUR3.5 billion (over 10x EBITDA and 21x
Operating Cash Flow), a significant premium to European
telecommunications multiples. 2 Shortly after completing the sale,
Zegona returned GBP335 million to its shareholders (over 90% of the
proceeds) through a combination of a dividend and a tender offer to
acquire Zegona shares at GBP1.535 per share (the "Capital
Return").
When announcing the Capital Return, management agreed to
re-invest GBP2.5 million into Zegona. This would have involved
issuing 1,734,451 new shares at a price of GBP1.44 per share 3 .
However, limits on the number of shares which could be issued at
that time meant only 887,594 shares were issued. Yesterday, the
balance of the shares 4 were issued at the previously agreed price
and as a result management increased its shareholding from 18.0 5 %
to 29.1%. 6
Following last year's successful sale of Euskaltel, management
has been looking for Zegona's next investment in the European
Telecommunications market. We have been active on a number of
proprietary transactions where we see material upside potential
while maintaining strong financial discipline. This approach has
served us well in the current macro-economic environment as we are
now seeing an increased pipeline of even better opportunities where
we have the potential to drive significant value.
Enquiries
Tavistock (Public Relations adviser - UK)
Tel: +44 (0)20 7920 3150
Lulu Bridges - lulu.bridges@tavistock.co.uk
Jos Simson - jos.simson@tavistock.co.uk
1. Euskaltel is, a Spanish telecommunications company incorporated
in Spain and operating in the Basque Country, Asturias
and Galicia under regional brands and nationally under
the Virgin telco brand. At the time, Zegona owned 21.44%
of Euskaltel and was its largest shareholder.
2. Euskaltel multiples based on its Enterprise Value divided
by its reported 2020 EBITDA (as defined by Euskaltel)
of EUR342.8 million and reported 2020 Operating Cash Flow
(as defined by Euskaltel as EBITDA-Capex) of EUR164.5
million. Comparable European Cable company multiples of
6.7x 2020 EBITDA and 13.3x 2020 Operating Cash Flow (Source:
Citigroup).
3. Being the adjusted Net Asset Value per share of Zegona
on 14 October 2021 of GBP1.438, which was calculated,
with no provisions being made for any potential value
being received from the non-current tax receivable (as
disclosed in Zegona's Annual Report for the year ended
December 31, 2021) and no provisions for the termination
costs of any contracts or other future potential liabilities
4. Being a total of 846,857 Ordinary Shares.
5. 17.98%
6. Details of dealings by Persons Discharging Managerial
Responsibility are provided in the Annex below. It is
expected that the new ordinary shares will be admitted
to trading at 8am on 15 November 2022. Upon admission,
Zegona's total voting rights will be 6,172,424.
ANNEX
Notification and public disclosure of transaction by persons
discharging managerial responsibilities and persons closely
associated with them
a) Name Eamonn O'Hare
2. Reason for the Notification
-------------------------------------------------------------------------------------
a) Position/status Chairman and Chief Operating Officer
------------------------------- ----------------------------------------------------
b) Initial notification/ Initial
Amendment
------------------------------- ----------------------------------------------------
3. Details of the issuer, emission allowance market participant,
auction platform, auctioneer or auction monitor
-------------------------------------------------------------------------------------
a) Name Zegona Communications plc
------------------------------- ----------------------------------------------------
b) LEI 213800ASI1VZL2ED4S65
------------------------------- ----------------------------------------------------
4. Details of the transaction(s):section to be repeated
for (i) each type of instrument; (ii) each type of transaction;
(iii) each date; and (iv)each place where transactions
have been conducted
-------------------------------------------------------------------------------------
a) Description Ordinary shares of 1 pence each
of the financial
instrument,
type of instrument
------------------------------- ----------------------------------------------------
Identification ZEG
code
------------------------------- ----------------------------------------------------
b) Nature of the Share subscription
transaction
------------------------------- ----------------------------------------------------
c) Price(s) and Price Volume
volume(s)
------------------------------- ---------------- ----------------------------------
GBP1 .438 564,571
----------------------------------------------------- ----------------------------------
d) Aggregated Aggregate Aggregate Aggregate total
information Price Volume
Aggregated
volume
------------------------------- ---------------- ---------- ----------------------
GBP1.438 564,571 811,853.10
----------------------------------------------------- ---------- ----------------------
e) Date of the 9 November 2022
transaction
------------------------------- ----------------------------------------------------
f) Place of the London Stock Exchange (XLON)
transaction
------------------------------- ----------------------------------------------------
a) Name Robert Samuelson
2. Reason for the Notification
-----------------------------------------------------------------------------------
a) Position/status Chief Operating Officer
------------------------------- --------------------------------------------------
b) Initial notification/ Initial
Amendment
------------------------------- --------------------------------------------------
3. Details of the issuer, emission allowance market participant,
auction platform, auctioneer or auction monitor
-----------------------------------------------------------------------------------
a) Name Zegona Communications plc
------------------------------- --------------------------------------------------
b) LEI 213800ASI1VZL2ED4S65
------------------------------- --------------------------------------------------
4. Details of the transaction(s):section to be repeated
for (i) each type of instrument; (ii) each type of transaction;
(iii) each date; and (iv)each place where transactions
have been conducted
-----------------------------------------------------------------------------------
a) Description Ordinary shares of 1 pence each
of the financial
instrument,
type of instrument
------------------------------- --------------------------------------------------
Identification ZEG
code
------------------------------- --------------------------------------------------
b) Nature of the Share subscription
transaction
------------------------------- --------------------------------------------------
c) Price(s) and Price Volume
volume(s)
------------------------------- --------------- ---------------------------------
GBP1 .438 282,286
---------------------------------------------------- ---------------------------------
d) Aggregated Aggregate Aggregate Aggregate total
information Price Volume
Aggregated
volume
------------------------------- --------------- ---------- ---------------------
GBP1.438 282,286 405,927.27
---------------------------------------------------- ---------- ---------------------
e) Date of the 9 November 2022
transaction
------------------------------- --------------------------------------------------
f) Place of the London Stock Exchange (XLON)
transaction
------------------------------- --------------------------------------------------
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