Private equity firms launch a £2.66 billion friendly bid to buy Spain’s MasMovil

Private equity firms launch a £2.66 billion friendly bid to buy Spain’s MasMovil
  • KKR, Cinven, and Providence launch a £2.66 billion friendly bid to buy Spain’s MasMovil.
  • The offer represents a premium of 20% over the company’s closing share price on Friday.
  • Potential buyers are expected to keep MasMovil's staff, executives, and strategy unchanged.

Private equity firms KKR, Providence, and Cinven, launched a £2.66 billion friendly bid on Monday to purchase Spain’s MasMovil (BME: MAS). Following the news, shares of the telecom operator were reported to have surged over 20% in the stock market.

At £20.54 per share, Masvomil is currently more than 10% up year to date in the stock market after recovering from the COVID-19 driven downward rally that resulted in a low of £10.94 per share in March. Learn more about how to choose winning stocks.

Buyout funds have placed a bid for £20.18 per share

Buyout funds have been on a halt in recent months due to the Coronavirus pandemic that pushed the government into imposing strict social distancing measures. The flu-like virus has so far infected more than a quarter-million people in Spain and caused over 27,000 deaths.

The agreement marks the first attempt by prominent buyout funds in 2020 to purchase a publicly listed European company. As per sources, the private equity investors plan on taking MasMovil private following the completion of the transaction.

The funds have placed a bid for £20.18 per share and highlighted that 29.56% of MasMovil’s shareholders have already agreed to the offer that represents a premium of 20% over the company’s closing share price on Friday.

MasMovil is a prominent name in the league of mobile, fixed-line, and internet services provider in Spain. Founded in 1997, the company has focused on acquisitions to make its place in the competitive Spanish market. In 2016, the telecom operator acquired two of its smaller rivals, Yoigo and Pepephone.

According to CEO Meinrad Spenger of Masmovil, “The deal will be beneficial for the shareholders and other stakeholders in the company.” He further highlighted on Monday that the company has signed the deal after holding talks with the private equity firms.  

MasMovil’s staff, executive team, and strategy to remain unchanged

MasMovil’s bourse statement on Monday also highlighted that the potential buyers plan on keeping the company’s current staff and executive team, and that the company’s strategy is expected to see no change following the shift in ownership.  

As per the buyout funds, further procedures will be carried out following approval from a minimum of 50% of MasMovil’s shareholders.

MasMovil’s performance in the stock market was not reported too upbeat in 2019 with an annual gain of roughly 5%. At the time of writing, it is valued at £2.87 billion and has a price to earnings ratio of 34.09.

By Wajeeh Khan
Mr. Khan specialises in Public Health by academia but is a trader by passion. Taking up two new hobbies of writing and trading in his teen years, he is now a professional trader and news writer with over 5 years of experience in various financial markets. Khan is passionate about bringing insightful articles to his readers and hopes to add value to their portfolios.
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