Zegona Communications PLC MANAGEMENT INCREASES SHAREHOLDING IN ZEGONA TO 29% (9069F)

TIDMZEG

RNS Number : 9069F

Zegona Communications PLC

10 November 2022

NOT FOR DISTRIBUTION, PUBLICATION OR RELEASE, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES OR TO ANY US PERSON, CANADA, AUSTRALIA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA (OTHER THAN SPAIN) OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION, PUBLICATION OR RELEASE WOULD BE UNLAWFUL.

ZEGONA COMMUNICATIONS PLC ("Zegona")

LEI: 213800ASI1VZL2ED4S65

10 November 2022

MANAGEMENT INCREASES ITS SHAREHOLDING IN ZEGONA TO 29%

In 2021, Zegona sold its investment in Euskaltel S.A.(1) ("Euskaltel") for EUR11.17 per share in cash. This valued Euskaltel's equity at EUR2.0 billion, which equated to an Enterprise Value of EUR3.5 billion (over 10x EBITDA and 21x Operating Cash Flow), a significant premium to European telecommunications multiples. 2 Shortly after completing the sale, Zegona returned GBP335 million to its shareholders (over 90% of the proceeds) through a combination of a dividend and a tender offer to acquire Zegona shares at GBP1.535 per share (the "Capital Return").

When announcing the Capital Return, management agreed to re-invest GBP2.5 million into Zegona. This would have involved issuing 1,734,451 new shares at a price of GBP1.44 per share 3 . However, limits on the number of shares which could be issued at that time meant only 887,594 shares were issued. Yesterday, the balance of the shares 4 were issued at the previously agreed price and as a result management increased its shareholding from 18.0 5 % to 29.1%. 6

Following last year's successful sale of Euskaltel, management has been looking for Zegona's next investment in the European Telecommunications market. We have been active on a number of proprietary transactions where we see material upside potential while maintaining strong financial discipline. This approach has served us well in the current macro-economic environment as we are now seeing an increased pipeline of even better opportunities where we have the potential to drive significant value.

Enquiries

Tavistock (Public Relations adviser - UK)

Tel: [phone]

Lulu Bridges - [e-mail]

Jos Simson - [e-mail]

 
 1.   Euskaltel is, a Spanish telecommunications company incorporated 
       in Spain and operating in the Basque Country, Asturias 
       and Galicia under regional brands and nationally under 
       the Virgin telco brand. At the time, Zegona owned 21.44% 
       of Euskaltel and was its largest shareholder. 
 2.   Euskaltel multiples based on its Enterprise Value divided 
       by its reported 2020 EBITDA (as defined by Euskaltel) 
       of EUR342.8 million and reported 2020 Operating Cash Flow 
       (as defined by Euskaltel as EBITDA-Capex) of EUR164.5 
       million. Comparable European Cable company multiples of 
       6.7x 2020 EBITDA and 13.3x 2020 Operating Cash Flow (Source: 
       Citigroup). 
 3.   Being the adjusted Net Asset Value per share of Zegona 
       on 14 October 2021 of GBP1.438, which was calculated, 
       with no provisions being made for any potential value 
       being received from the non-current tax receivable (as 
       disclosed in Zegona's Annual Report for the year ended 
       December 31, 2021) and no provisions for the termination 
       costs of any contracts or other future potential liabilities 
 4.   Being a total of 846,857 Ordinary Shares. 
 5.   17.98% 
 6.   Details of dealings by Persons Discharging Managerial 
       Responsibility are provided in the Annex below. It is 
       expected that the new ordinary shares will be admitted 
       to trading at 8am on 15 November 2022. Upon admission, 
       Zegona's total voting rights will be 6,172,424. 
 

ANNEX

Notification and public disclosure of transaction by persons discharging managerial responsibilities and persons closely associated with them

 
 a)    Name                             Eamonn O'Hare 
 2.    Reason for the Notification 
      ------------------------------------------------------------------------------------- 
 a)    Position/status                  Chairman and Chief Operating Officer 
      -------------------------------  ---------------------------------------------------- 
 b)    Initial notification/            Initial 
        Amendment 
      -------------------------------  ---------------------------------------------------- 
 3.    Details of the issuer, emission allowance market participant, 
        auction platform, auctioneer or auction monitor 
      ------------------------------------------------------------------------------------- 
 a)    Name                             Zegona Communications plc 
      -------------------------------  ---------------------------------------------------- 
 b)    LEI                              213800ASI1VZL2ED4S65 
      -------------------------------  ---------------------------------------------------- 
 4.    Details of the transaction(s):section to be repeated 
        for (i) each type of instrument; (ii) each type of transaction; 
        (iii) each date; and (iv)each place where transactions 
        have been conducted 
      ------------------------------------------------------------------------------------- 
 a)    Description                      Ordinary shares of 1 pence each 
        of the financial 
        instrument, 
        type of instrument 
      -------------------------------  ---------------------------------------------------- 
       Identification                   ZEG 
        code 
      -------------------------------  ---------------------------------------------------- 
 b)    Nature of the                    Share subscription 
        transaction 
      -------------------------------  ---------------------------------------------------- 
 c)    Price(s) and                     Price             Volume 
        volume(s) 
      -------------------------------  ----------------  ---------------------------------- 
   GBP1 .438                                              564,571 
  -----------------------------------------------------  ---------------------------------- 
 d)    Aggregated                       Aggregate         Aggregate   Aggregate total 
        information                      Price            Volume 
        Aggregated 
        volume 
      -------------------------------  ----------------  ----------  ---------------------- 
   GBP1.438                                               564,571     811,853.10 
  -----------------------------------------------------  ----------  ---------------------- 
 e)    Date of the                      9 November 2022 
        transaction 
      -------------------------------  ---------------------------------------------------- 
 f)    Place of the                     London Stock Exchange (XLON) 
        transaction 
      -------------------------------  ---------------------------------------------------- 
 
 
 
 a)    Name                             Robert Samuelson 
 2.    Reason for the Notification 
      ----------------------------------------------------------------------------------- 
 a)    Position/status                  Chief Operating Officer 
      -------------------------------  -------------------------------------------------- 
 b)    Initial notification/            Initial 
        Amendment 
      -------------------------------  -------------------------------------------------- 
 3.    Details of the issuer, emission allowance market participant, 
        auction platform, auctioneer or auction monitor 
      ----------------------------------------------------------------------------------- 
 a)    Name                             Zegona Communications plc 
      -------------------------------  -------------------------------------------------- 
 b)    LEI                              213800ASI1VZL2ED4S65 
      -------------------------------  -------------------------------------------------- 
 4.    Details of the transaction(s):section to be repeated 
        for (i) each type of instrument; (ii) each type of transaction; 
        (iii) each date; and (iv)each place where transactions 
        have been conducted 
      ----------------------------------------------------------------------------------- 
 a)    Description                      Ordinary shares of 1 pence each 
        of the financial 
        instrument, 
        type of instrument 
      -------------------------------  -------------------------------------------------- 
       Identification                   ZEG 
        code 
      -------------------------------  -------------------------------------------------- 
 b)    Nature of the                    Share subscription 
        transaction 
      -------------------------------  -------------------------------------------------- 
 c)    Price(s) and                     Price            Volume 
        volume(s) 
      -------------------------------  ---------------  --------------------------------- 
   GBP1 .438                                             282,286 
  ----------------------------------------------------  --------------------------------- 
 d)    Aggregated                       Aggregate        Aggregate   Aggregate total 
        information                      Price           Volume 
        Aggregated 
        volume 
      -------------------------------  ---------------  ----------  --------------------- 
   GBP1.438                                              282,286     405,927.27 
  ----------------------------------------------------  ----------  --------------------- 
 e)    Date of the                      9 November 2022 
        transaction 
      -------------------------------  -------------------------------------------------- 
 f)    Place of the                     London Stock Exchange (XLON) 
        transaction 
      -------------------------------  -------------------------------------------------- 
 
 

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November 10, 2022 02:01 ET (07:01 GMT)