Endesa Ord Regulatory News (0N9G)

27 Jul 2005 07:16

Banco Santander Central Hispano SA27 July 2005 Endesa, Banco Santander Central Hispano and Union Fenosa, the majorityshareholders of Grupo Auna, have reached an agreement in principle with Orange,a subsidiary of France Telecom, for the sale of the mobile telephone business ofAuna, which is carried out through its affiliate company Amena. Minorityshareholders in Auna will have the option of participating as sellers in thetransaction. The transaction will be carried out through the sale of 80% of the equitycapital of Auna following the spin-off of Auna TLC and other assets not relatedto mobile telephony, which will be submitted to the Shareholders' Meeting ofAuna. The basic terms of the transaction are as follows: • The initial price for 80% of the equity capital of Auna(after the spin-off referred to above and excluding debt) is 6.4 billion euros,subject to the usual adjustments in this type of transaction, which are mainlythe variations in indebtedness and working capital through the date of theclosing of the transaction. This price implies a valuation of 100% of thebusiness of Amena of 10.6 billion euros, including debt and minoritary interestsin Amena. • At the request of the buyer, the sellers will reinvest partof the amount obtained through the sale (up to a maximum of 3 billion euros, tobe determined by the buyer) in a new share issue by France Telecom, which theywill be proscribed from selling until 1 January 2007. From 1 January 2007 until31 March 2007 the sellers can dispose of these shares, claiming from FranceTelecom the difference, in their favour or against, between the sale price and avalue equivalent to the acquisition price plus an annual rate of 4%. Moreover,the vendors will grant to France Telecom an option to buy said shares once theyhave been subscribed, which can be exercised at the same value. • Regarding the 20% of equity stock of Auna not being sold now,such stake may be sold to Orange and / or France Telecom or to third parties, orthrough a placement in the stock exchange, once three years have lapsed from theinitial purchase. A mechanism has been agreed upon, allowing a minimumguaranteed price equivalent to 90% of the price per share paid by Orange in theinitial purchase, plus an annual rate of 4.5%. After the close of the transaction France Telecom and Orange foresee the mergerof Auna (after the spin-off of the business of Auna TLC) and Amena with FranceTelecom Espana (Wanadoo). Endesa, Banco Santander and Union Fenosa, togetherwith the other shareholders of Auna will participate in the share capital of thecompany created by this merger. The sellers will have the right to designate,jointly, at least one director of the company. This transaction is subject to the approval of the appropriate administrativebodies of the parties and the signing of final documentation, which is expectedto occur no later than July 29, 2005. The approval by the Shareholders' Meetingof France Telecom of the capital increase that may be necessary to carry out theabovementioned reinvestment will also be required. The transaction will also besubmitted to competition authorities. Boadilla del Monte (Madrid) July 27, 2005 This information is provided by RNS The company news service from the London Stock Exchange