Newtel AB: Cash Offer for Esat Telecom Group PLC
The Board of Newtel announces a cash offer for the entire issued and to be issued ordinary share capital of Esat. The Offer will be made by HSBC, AIB Corporate Finance and Wasserstein Perella & Co. on behalf of Newtel Ireland, a wholly owned subsidiary of Newtel.
The Offer is US$72 cash for each Esat ADS or US$36 cash for each Esat Share
The Offer:
values the entire issued ordinary share capital of Esat at approximately US$1.59bn ;
represents a premium of 64 per cent. to the average Esat ADS closing price of US$43.95 over the last 90 days;
represents a premium of 24 per cent. to the Esat ADS closing price of US$58 on Monday, 29 November 1999, the day before discussions took place between Newtel and Denis O Brien, Esat s Chairman and Chief Executive Officer, relating to a possible offer for Esat; and
represents a premium of 11 per cent. to yesterday's closing price of US$65.1 per Esat ADS
Newtel, based in Stockholm, Sweden, is Scandinavia s leading provider of fixed and mobile telephony, internet services and satellite communications. Newtel was formed by the merger of Telia AB and Telenor AS, respectively Sweden s and Norway s principal providers of telecommunications services. The merger became effective in October 1999.
The Newtel Group had combined sales in excess of US$9.5bn for the 1998 financial year and has approximately 50,000 employees worldwide.
Esat, based in Dublin, Ireland, provides business and residential telecommunications and internet services. Esat and Newtel each own 49.5 per cent. of Digifone, one of the two GSM mobile phone operators in Ireland. Esat s consolidated revenues for the year ended 31 December 1998 were US$40.5m.
The Irish market is important to Newtel's international strategy. Newtel believes the following would be significant benefits from Esat being part of the Newtel Group:
the ownership of Digifone will be simplified, facilitating the development of synergies between fixed and wireless platforms and offerings to serve the voice, data and internet markets;
Newtel will be able to exchange technological know-how and expertise with Esat to accelerate the development of both groups; and
Esat s improved access to technology and capital will allow it to introduce new products and services more rapidly to Irish business and private consumers than it is able to under its existing ownership structure.
Yesterday, Newtel had a meeting with Denis O Brien, Chairman and Chief Executive Officer of Esat, with a view to obtaining support for a recommended offer. However, it was not possible to reach a satisfactory outcome.
Announcing the Offer, Tormod Hermansen, the Chief Executive Officer and President of Newtel, said:
"The Irish market is an important part of our international strategy and we wish to expand our presence in Ireland. We tried to obtain a recommendation for our offer. As this was not forthcoming, we decided to put our offer directly to shareholders.
As part of the Newtel Group, we believe that Esat would be able to expand more rapidly the range of products and services it offers, to the benefit of Irish consumers."
Media enquiries
Today in Dublin:
Newtel Terje Thon +353 1 667 0233
Morten Karlsen Sørby +353 1 667 0233
Carina Axelsson +353 1 667 0233
Thereafter:
Newtel Reidar Gjaerum (Oslo) + 47 22 77 8590
Ulf Bäckman (Stockholm) + 46 87 13 5830
HSBC Richard Tolkien +44 171 336 9000
Desmond Connor +44 171 336 9000
AIB Corporate Finance John O'Donnell +353 1 667 0233
Ken McGrath +353 1 667 0233
Wasserstein Perella & Co. Howard Covington +44 171 446 8000
Brunswick Group Limited Rurik Ingram +44 171 404 5959
Simon Holberton +44 171 404 5959
Gibney Communications Ita Gibney + 353 1 661 0402
The 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 Newtel and Newtel Ireland and no one else in connection with the Offer and will not be responsible to anyone other than Newtel and Newtel 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 Offer.
Not for release, publication or distribution, in whole or in part, in or into Canada, Australia or Japan. This announcement is not an extension of a tender offer in Canada, Australia or Japan.
The press release has been condenced. The entire document is available to download here .
