Tele Columbus sets IPO price range

Tele Columbus, Germany’s third largest cable network operator, has revealed further details on its initial public offering. The price range for the offered shares has been set at €8 to €12 per share. The offer period will start on January 13th 2015 and is expected to end on January 21st 2015. The admission to trading on the regulated market (Prime Standard) of the Frankfurt Stock Exchange is planned for January 23rd. As part of the IPO, the Company and Tele Columbus Management S.à r.l., Luxembourg, will offer for sale of up to 52,772,500 shares, comprising up to 37,500,000 new primary shares resulting from a capital increase and up to 15,272,500 existing shares to be sold by Tele Columbus S.à r.l., a holding company which is indirectly held by the ultimate shareholders of Tele Columbus. An additional up to 3,750,000 existing shares could be borrowed from Tele Columbus S.à r.l. for a potential over allotment.

In connection with the over-allotment, the Company will grant an option to the involved banks to acquire up to 3,750,000 additional new shares in the Company (equal to the number of over-allotment shares) (Greenshoe Option) for the sole purpose of enabling redelivery of the borrowed shares to Tele Columbus S.à r.l. In Tele Columbus S.à r.l., indirectly 150 investors including certain non-strategic financial institutions and Tele Columbus New Management Participation GmbH & Co. KG are invested.

The total offering size is expected to be €447 million if the offered shares are placed at the mid-point of the price range (€477 million if the over-allotment option is exercised in full). This corresponds to a market capitalisation of €530 million at the mid-point of the price range.

“The IPO will give us additional financial flexibility to implement our successfully-initiated growth strategy in the coming years,” commented Ronny Verhelst, CEO of Tele Columbus.

The offering consists of initial public offerings in Germany and Luxembourg as well as private placements in certain jurisdictions outside these two countries.

Tele Columbus aims to achieve proceeds of around €300 million from the sale of new shares (excluding potential greenshoe proceeds of up to 10 per cent of the offering of new shares).

The Company intends to use most of the net proceeds of the offering of the new shares to improve its capital structure and reduce financial liabilities. The Company will use the remaining portion of the proceeds for general corporate purposes, in particular to upgrade its network and to connect additional homes to its own integrated L3 network infrastructure. Tele Columbus intends to maintain a target leverage of 3.0 to 4.0 times Normalised EBITDA in the medium term.

“Over the medium term, we want to raise the number of products per customer from today’s 1.43 to 1.7, grow the monthly average revenue per customer from €14 to €17 and increase the share of upgraded households supplied with own signals from 54 per cent to 70 per cent. This is intended to further strengthen the position of Tele Columbus as the number three operator in the German cable market,”, added Verhelst.

In the future, Tele Columbus plans further focused investments to expand its own cable network and connect households to Tele Columbus’ proprietary network and product world that have previously been served with third party signals. This migration is expected to result in further savings on signal fees to third parties, drive margin expansion and create further growth potential for up-selling and cross-selling additional services such as premium TV products, Internet and Telephony via cable.

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