Swedish telecoms provider Tele2 has offered €1.34 billion in cash for Dutch telecoms company Versatel to push Versatel shares up more than 12 per cent today.
Tele2 plans to sell Versatel's German business to investment funds advised by British private equity group Apax Partners for about €565 million on an enterprise-value basis once it completes its offer, the companies said.
The deal will enable Versatel, which has an enterprise value of €1.13 billion, and Tele2, which has a market value around $4.3 billion, to benefit from each other's operations in the Benelux region amid consolidation in the European telecoms market and a search for economies of scale.
Tele2, an aggressive Swedish-based telecoms group, has built its business across Europe, Russia and the Baltic area by buying companies and licences and launching discount mobile phone services by acquiring airtime from other network operators.
The Dutch group, which last month abandoned strategic talks with Belgium's Belgacom, said it would also benefit greatly from investment by Apax-led funds in its German operations, which contribute around 47 per cent of core profits.
Tele2 plans to offer €2.20 per share for Versatel's outstanding ordinary shares and around €132,274 per note for the firm's outstanding convertible notes.
The offer represents a 14 per cent premium to Versatel's closing share price of €1.93 on Friday and a 47 per cent premium over the closing price of €1.50 on April 28, the day prior to the first reports on its discussions with Belgacom.
Shares in Versatel, which emerged from near bankruptcy almost three years ago, were 12.44 per cent higher at €2.17 by 8.26 am, at 11-week highs and the biggest gainer on the Amsterdam exchange.
Tele2 shares rose 1.3 per cent.