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(Adds detail on Providence commitment, updates shares)
By Inti Landauro and Isla Binnie
MADRID, June 1 (Reuters) - KKR, Cinven and
Providence said on Monday they had made a 2.96 billion euro
($3.3 billion) board-backed bid for Spanish telecoms operator
MasMovil.
In the first European take-private attempt by major buyout
firms since the coronavirus crisis struck, the private equity
trio said holders of 29.56% of MasMovil's stock had already
agreed to sell for 22.50 euros per share.
Providence is MasMovil's second-largest shareholder, with a
9.16% stake in the seller of fixed line, mobile and Internet
services which has made a series of acquisitions since listing
on Madrid's index for smaller, growing companies in 2014.
All three funds will end up with an equal stake in MasMovil
if the deal goes through, and Providence has agreed not to
accept a counter-bid from any other would-be buyer, the offer
document said.
The operator's shares soared on the opening and were still
the leading gainer on Spain's main index at 1200 GMT, at
around 23 euros, some 23% higher than Friday's close.
MasMovil has built up a position in the fiercely competitive
Spanish market in recent years by buying lower-cost brands
Pepephone and Yoigo. If successful, its sale would follow hot on
the heels of Telefonica's deal to merge its British
business with Liberty Global's Virgin Media.
.
European telecoms operators have struggled to boost profit
growth in a crowded market and in Spain, Euskaltel has
launched a new national service under the Virgin brand to take
on Telefonica, France's Orange and Britain's Vodafone
as well as MasMovil.
MasMovil Chief Executive Meinrad Spenger said in a statement
it had signed an agreement with the bidders on a deal which he
said would be "beneficial for the shareholders and other
stakeholders in the company".
It added the bidders had said they would maintain continuity
in MasMovil's strategy, staff and executive team.
Although the offer price is well below a five-year high of
25.52 euros hit in March 2018 and 23.68 late last year, it still
values the company at a premium of around 20% to its closing
price on Friday.
MasMovil's shares dropped to 12.20 euros in March when Spain
was reporting hundreds of coronavirus deaths each day.
The bid for MasMovil is conditional on acceptance from at
least 50% of shareholders, the funds said.
A source familiar with the transaction said telecoms
companies already active in Spain may step in and offer a higher
premium to take control of MasMovil based on the synergies the
deal would unlock.
Yet analysts have cautioned that any interloper would face
resistance from Providence.
Goldman Sachs and BNP Paribas advised MasMovil while
Morgan Stanley and Barclays represented the private equity
consortium and guaranteed financing for the deal along with BNP,
two sources close to the deal said.
($1 = 0.8977 euros)
(Reporting by Inti Landauro and Isla Binnie
Additional reporting by Pamela Barbaglia
Editing by Ingrid Melander, Alexander Smith and David Evans)
