LONDON/MADRID Spain's Euskaltel (EKTL.MC) said on Tuesday it had made an offer of around 700 million euros ($770 million), including debt, for Zegona's (ZEG.L) Telecable, consolidating the Basque telecommunication company's lead in northern Spain.
The offer for the largest cable operator in Spain's northern Asturias region gives an enterprise value of 686 million euros, including 245 million euros of debt, plus an additional contingent payment of up to 15 million euros of tax assets.
Euskaltel will pay 186 million euros in cash and 255 million euros in new shares through a capital increase of 26.8 million ordinary shares, issued at 9.5 euros per share, fully subscribed by Zegona.
The buyout is the latest in a round of consolidation moves within Spain's telecoms sector in the last few years, after Mas Movil bought Yoigo and Pepephone, Vodafone (VOD.L) bought Ono, Orange (ORAN.PA) snapped up Jazztel and Euskaltel bought R Cable.
Euskaltel shares rose 3.2 percent to 9.509 euros by 0733 GMT. Zegona shares jumped 9 percent in early trade.
Zegona, set up to invest in European technology, media and telecoms companies, bought Telecable in 2015 for $706 million. As part of the sale it will get a 15 percent stake in the combined entity and have one board seat.
Euskaltel said the acquisition would generate estimated synergies of around 245 million euros.
The Basque company said in a presentation it aims to close the operation by the third quarter, after being cleared by regulation authorities and approved by the Euskaltel shareholders during their annual meeting in June.
(Reporting by Kate Holton and Paul Day; editing by Jason Neely and Louise Heavens)