Former Virgin Media execs’ outfit buys Spain’s Telecable for €640m

UK-based investment group Zegona has acquired the smallest of Spain’s three independent cable operators, Telecable, for €640 million.

Zegona’s deal to buy Telecable, which operates in the Asturias region of northern Spain, followed hard on Basque region operator Euskaltel’s agreement to acquire Galician operator R for €1.155 billion. Euskaltel was seen as the most likely candidate to acquire Telecable and create a consolidated northern Spanish cable operation spanning the three regions.

Zegona, created by former Virgin Media finance chief Eamonn O’Hare and Robert Samuelson, another former Virgin Media executive and floated in London in March, will use £251 million in new equity backed by institutional investors, funds from its flotation and a new debt facility arranged by Goldman Sachs to fund the acquisition.

Local observers expect Zegona to work towards increasing the value of Telecable, for example by expanding its mobile activity, before selling it on to another buyer, which could be the combined Euskaltel and R, Vodafone or Orange.

Zegona has acquired Telecable from Goldman Sachs, which held an 85% stake, and Liberbank.