Zegona eyes Yoigo as Telecable posts solid results

Zegona Communications, owner of Asturias region cable operator Telecable, and MVNO MásMóvil are among the companies to have placed bids for fourth-ranked Spanish mobile operator Yoigo, according to local reports.

According to Expansión, the two groups have submitted offers to acquire Yoigo to TeliaSonera, 76.6% owner of the company.

According to Expansión, citing unnamed sources, TeliaSonera is determined to make a sale if the price is right and is could select one of the two parties for exclusive talks in the next few days, although there remains a possibility that a third potential buyer might emerge.

However, the paper notes that the urgency of striking a sale agreement has lessened as Yoigo’s performance has improved recently.

Commenting on Zegona and Telecable’s just-published end-of-year results, Zegona chairman and CEO Eamonn O’Hare said that the company was continuing “to see the dynamic forces of consumer consumption, industry consolidation and convergence creating many attractive opportunities for additional acquisitions”. He said that driving shareholder value was the company’s “number one priority” and that any acquisitions would be subject to a disciplined evaluation.

“Telecable is our first acquisition and has made a great start under Zegona ownership. We are particularly pleased that the business delivered its 2015 financial targets fully in line with our preacquisition expectations. We are also encouraged by the growing momentum in the business, underpinned by the recent consumer price rise (the first in many years) and accelerating growth in its Mobile and Business divisions,” said O’Hare.

“Telecable’s growth has outperformed other players in the Spanish market in recent years, and it is encouraging to see that track record being maintained. This performance, together with encouraging trends relating to price repair in the Spanish telecoms market and the improving economic environment, gives us the confidence that Telecable will accelerate growth across its key financial metrics in 2016.”

Zegona reported that Telecable’s revenue increased by 2.7% in 2015 to end the year at €134.4 million. It said that revenue growth accelerated in the fourth quarter, with growth of 5% representing a five-year high for the company.

EBITDA was up 3.3% to €65 million, while cash-flow was up 2.4% to €36.1 million.

O’Hare confirmed a 4.5p dividend in line with the target set at the time of Zegona’s acquisition of Telecable.