Increased Cash Offer byTELENOR IRELAND for ESAT TELECOM GROUP PLC
The Board of Telenor Ireland announces a revision to increase the cash offer for the entire issued and to be issued ordinary share capital of Esat to $85 for each Esat ADS or $42.50 for each Esat Share (equivalent to approximately €42.1 per Esat Share).
On 21 December 1999, it was announced that, following the decision of the Governments of Norway and Sweden to unwind the merger of Telenor AS and Telia AB, Telenor AS had acquired the entire issued share capital of Newtel Ireland AB and that Telenor AS and Newtel Ireland AB would continue the Offer made for Esat. Newtel Ireland AB is in the process of being renamed Telenor Ireland AB.
The Increased Offer:
values the entire issued ordinary share capital of Esat at approximately $1,902 million (€1,884 million);
represents a premium of 93 per cent. to the average Esat ADS closing price of $43.95 over the 90 days trading days ended on 30 November 1999, the day prior to the announcement of the Initial Offer;
represents a premium of 47 per cent. to the Esat ADS closing price of $58 on 29 November 1999, the day before discussions took place between Newtel and Mr Denis O’Brien, Esat’s Chairman and Chief Executive Officer, relating to a possible offer for Esat; and represents a premium of 31 per cent. to the Esat ADS closing price of $65.1 on 30 November 1999, the day before the announcement of the Initial Offer.
Telenor is also revising the Offer to provide a Loan Note Alternative for certain holders of Esat Shares or Esat ADSs outside the United States, which may facilitate capital gains tax planning for those holders.
The Initial Offer Period is being extended and the Increased Offer will be open for acceptance until 3.00 p.m. Dublin time (10.00 a.m. New York time) on Friday 14 January 2000.
On 21 December Telenor’s financial advisers met with Esat’s financial advisers with a view to seeking a meeting between Telenor and Esat to negotiate a recommended transaction. Esat’s financial advisers subsequently indicated that Esat saw no basis for discussing a recommended offer around the level of the Increased Offer.
Telenor Ireland will shortly send to shareholders a document which demonstrates that:
Esat was an underperforming stock for most of 1999 and faces significant strategic challenges;
despite its claims, Esat is not comparable to the major Competitive Local Exchange Carriers (“CLECs”); and the Increased Offer substantially exceeds Esat’s intrinsic value.
Announcing the Increased Offer, Tormod Hermansen, the Chief Executive Officer and President of Telenor Ireland, said: “This increase shows that we mean business. We now want to bring matters rapidly to a close. We are offering shareholders an outstanding price for a fledgling fixed line and internet business and a minority position in a mobile business. Esat Shareholders have a simple choice: the certainty of Telenor’s offer or the risks associated with Esat’s share price if the offer lapses. We think shareholders should accept the Increased Offer immediately”.
NB:
The Increased Offer will not be made, directly or indirectly, in or into Canada, Australia or Japan. Accordingly, copies of this announcement are not being and must not be mailed or otherwise distributed or sent in or into Canada, Australia or Japan.
Each of HSBC and Wasserstein Perella & Co., which are regulated in the United Kingdom by the Securities and Futures Authority Limited, and AIB Corporate Finance, which is regulated in Ireland by The Central Bank of Ireland, is acting for Telenor and Telenor Ireland and no one else in connection with the Increased Offer and will not be responsible to anyone other than Telenor and Telenor Ireland for providing the protections afforded to customers of HSBC, Wasserstein Perella & Co. and AIB Corporate Finance respectively or for providing advice in relation to the Increased Offer.
Contact person:
Press Officer of Telenor, Dag Melgaard, tel (+47) 22 77 85 90 or (+47) 901 92 000
