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September 13, 2005 6:36 pm

Tele2 confirms €1.34bn Versatel offer

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Tele2, the Swedish telecommunications group, on Tuesday confirmed its €2.20-a-share cash offer for Versatel, the Dutch phone and data company, and said that it was confident the €1.34bn ($1.64bn) bid would succeed, despite opposition from minority shareholders.

The Swedish company said it would not raise its offer price, but it conceded  it may have to lower the 95 per cent acceptance threshold in the offer document, published on Tuesday, or use other means to squeeze out dissenting investors.

It also conceded there were risks in Versatel’s strategy of launching digital television, by broadcasting live football in the Netherlands, saying the Dutch company’s subscriber targets were ambitious.

But it backed the plan to pump cash into television, despite the fact that the take-up level  has been low and the launch was beset by technical problems.

Talpa, the investment company owned by John de Mol, the Big Brother creator, agreed to tender its 42 per cent before the takeover was announced in July. Tele2 said it had also received indications of support from institutional investors.

Per Borgklint, Tele2’s Benelux regional director, said he had no evidence that any large shareholders or hedge funds are considering boycotting the deal.

A Dutch group calling itself TeleNee (Tele No) and claiming to represent shareholders  holding “several per cent” of Versatel stock, is holding out for a higher offer price. Tele2 said it had been unable to verify the accuracy of TeleNee’s claims.

Separately, Centaurus, the UK hedge fund, recently declared a five per cent interest in Versatel but has not yet publicly taken a position on the offer, Tele2 said. Mr Borgklint said he was confident that Centaurus would tender to the bid.

 However if the threshold is not met, Tele2 could extend the offer period and attempt again to convince dissenting shareholders, lower the threshold or push through measures that would lead to the de-listing and dilution of outstanding Versatel stock.

The Swedish company also needs 85 per cent of bonds to be tendered, and has offered bondholders around €132,274.

The acceptance period runs from on Wednesday to October 7. Versatel will hold an extraordinary shareholders meeting on September 29 to discuss the transaction.

Tele2 has already won approval for the takeover from the European Commission, which saw no risk to competition fro the combined companies market share. Together, they would have more than 2.6m residential customers in the Netherlands and Belgium.

On completion of the offer Tele2 plans to sell Versatel's German business to investment funds advised by Apax Partners, the UK private equity group, for €539m.

 

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