Tele2 Makes Offer for Versatel

Tele2 to make €1.34B offer for Versatel Telecom

July 18, 2005

2 Min Read

STOCKHOLM -- Versatel Telecom International N.V. ("Versatel" or the "Company") and Tele2 Netherlands B.V. ("Offeror), a wholly owned subsidiary of Tele2 AB ("Tele2), jointly announce that the expectation is justified that an agreement can be reached in connection with the public offers for all outstanding ordinary shares at an offer price of EUR 2.20 in cash per ordinary share (the "Offer Share Price") and all outstanding convertible notes at an offer price equal to the sum of: (i) the cash equivalent value of the shares that noteholders have the right to convert into and (ii) 30 bps of the principal amount of the notes in cash per convertible note, which amounts to approximately EUR 132,274 per note (collectively the "Offers").

Tele2, Apax and Versatel have also reached an understanding that, upon completion of the Offers, Apax will acquire Versatel´s German operations from the Offeror, for an anticipated consideration of 565 million on an enterprise value basis.

The Supervisory Board and the Management Board of Versatel, after giving due consideration to the strategic, financial and social aspects of the proposed transactions, unanimously support the intended Offers and conclude that the Offers are in the best interest of the customers, employees, shareholders, noteholders and all other stakeholders of Versatel and recommend that shareholders and noteholders accept the intended Offers when made.

Versatel and the Offeror expect to reach a definitive agreement on the intended Offers over the next few weeks, subject, inter alia, to consultation with, and when applicable, advice from the relevant works councils of Versatel, as well as approval from the competition authorities.

It is currently expected that the Offers will be made and that consequently an Offer Memorandum will be published in the course of September 2005.

The intended Offers will be full cash offers for all the issued and outstanding ordinary shares and convertible notes in the capital of Versatel. The combined value of the Offers represents approximately EUR 1,340 million assuming 100% acceptance (on a fully diluted basis). Based on the Offer Share Price, Versatel is valued at approximately EUR 1,130 million on an enterprise value basis (based on Versatel´s net cash position on March 31, 2005).

The Offer of EUR 2.20 per Share represents a:

  • 14% premium over the closing price of EUR 1.93 on July 15, 2005;

  • 47% premium over the closing price of EUR 1.50 on April 28, 2005, the day prior to the first reports on discussions with Belgacom.

Tele2 AB

Versatel Telecom International N.V.

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