MásMóvil ready to integrate brands as Euskaltel offering crosses final regulatory hurdle, Access Evolution
Spanish securities regulations have given the green light to the takeover of Euskaltel by MásMóvil, scheduled for 2 billion euros, an agreement that will create a fourth stronger player in the market and leave it with a significant portfolio of brands to manage.
MásMóvil launched a € 11.17 per share takeover bid in March for the whole of Spain’s fifth-largest telecommunications operator, which valued it at around € 2 billion, although it lowered its price to around € 11 last month after Euskeltel paid € 0.17. -dividend per share; if there were to be further dividend payments before the deal was completed, the bid price will likely fall again.
The Comisión Nacional del Mercado de Valores (CNMV) this week approved the voluntary takeover bid at the new price, following the authorization of the government, which had to accept the angle of foreign investment; since last november, MásMóvil has been owned by investment companies Cinven, KKR and Providence.
So now MásMóvil needs to have shareholders on board. It needs the agreement of 75% plus one share of the current holders of Euskaltel for the deal to go through and has already secured 52.32% through the buyout of its three main shareholders – Zegona, Kutxabank and Alba Europe. The others will have to make up their own mind. The price looks attractive with the initial offer being the best part of 27% above the weighted average Euskaltel share price over the past six months, but there are other factors at play, the main one being probably the legacy of Euskaltel as a Basque company.
MásMóvil is fully aware of what this means and is committed to keeping the Euskaltel headquarters in Derio, just north of Bilbao, and its name for a period of five years, as well as making the right noise to keep existing staff.
Euskaltel is however much more than a Basque operator. It operates under the name Euskaltel in the Basque Country, but also serves Galicia as R and Asturias as Telecable. In addition, it established its stand as a national player in May of last year when it launched a converged fixed broadband, mobile and TV product under the Virgin Telco brand.
Four other brands are joining the MásMóvil team, which is already full of its acquisitions with various names in recent years. In addition to his own name and Yoigo – the mobile service provider he bought from Telia in 2016 – MásMóvil also operates Hits Mobile, Pepephone, Llamaya, Lebara and Lycamobile, as well as a handful of lesser-known labels.
The global telecom industry has often seen large telecom companies stutter trying to merge brands and cultures after takeovers, but so far MásMóvil seems to be doing it.
Its figures for the year 2020 showed a 19% growth in turnover to 1.74 billion euros and an increase in EBITDA of 37% to 642 million euros, while the total number of customers amounted to 11.5 million, up 28% year on year. Of course, some of this growth was inorganic, but the growth has continued since; At the end of the second quarter, MásMóvil said it had 11.8 million customers, split between its mobile business with 9.7 million and fixed broadband (2.1 million).
Euskaltel is small in comparison, especially in the mobile space. Of its 847,000 consumer customers at the end of the first quarter, 737,000 were fixed accounts and only 110,000 mobile customers. Interestingly, its total includes 101,000 Virgin Telco customers – 80,000 landlines and 21,000 mobile phones – all raised in its first 10 months of operation.
But despite solid growth, Euskaltel will not have a huge impact on MásMóvil’s market share, assuming the deal goes through. MásMóvil accounted for 17% of the Spanish mobile market at the end of last year, while Vodafone, the smallest of the big three, held 22%, slightly behind Orange’s 23%. MásMóvil’s position in fixed is weaker, its market share amounting to just under 8.5%.
Nevertheless, it has firmly established itself as the fourth player in the market, both in mergers and acquisitions and organic growth, and swallowing up the bulk of non-residents allows it to eliminate a low-end competitor. . Buying out the fifth operator could be a smart move, provided it can handle all of these brands.
– Mary Lennighan, report for TelecomTV