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MADRID, July 23 (Reuters) - Euskaltel said onThursday it had agreed an offer for fellow cable company RCable, giving it an enterprise value of 1.2 billion euros ($1.3billion) in the latest wave of consolidation in the Spanishtelecommunications market.
Tough competition and falling prices during a recession havedriven multibillion takeover deals in Spain with France's Orange buying telecoms group Jazztel in September andVodafone buying cable operator Ono in March.
This latest deal between two of the last three independentcable operators in the country will create a network of around725,000 kilometres to serve 715,000 residential and businesscustomers in the north of Spain, Euskaltel said.
Basque country-based Euskaltel has offered shareholders inGalicia-based R Cable a deal mostly in cash with the rest in newshares, the company said in a statement, without giving furtherdetails. The regionally-focused companies will retain their ownbrands.
The offer values R Cable, which is majority owned by privateequity firm CVC, at around 10.9 times its earningsbefore interest, tax, depreciation and amortisation (EBITDA), asimilar valuation to Euskaltel's stock market listing earlierthis month, the company said.
The agreement has been authorised by the boards of bothcompanies and is subject to due diligence and regulatorapproval.
Analysts had long expected further tie-ups amongst smallcompanies in Spain's cable market, where Vodafone is the biggestplayer following its Ono purchase in March.
Telecable, a cable company in the northern region ofAsturias majority-owned by U.S. private equity fund Carlyle, is the last remaining independent player.
Euskatel's main shareholders are former savings bankKutxabank, Italian-owned private investors International Cableand Spanish utility Iberdrola. ($1 = 0.9099 euro) (Reporting by Sonya Dowsett)
