Ono, the Spanish cable company backed by a consortium of four US private equity firms, has agreed to buy Auna’s fixed line business for €2.25bn in a reversal of fortunes for the company. Auna rejected a €2.4bn offer for the business from Ono in November.
JP Morgan Partners, Providence Equity Partners, Quadrangle Capital Partners and Thomas H Lee have taken equal stakes in Auna for a collective €1bn. Ono, which last year carried out a €1.25bn refinancing, will pay for the rest of the business through its debt facilities. Debt for the acquisition is understood to have been lined up from BNP Paribas, Barclays, JP Morgan, Bank of America, ABN AMRO and Royal Bank of Scotland.
The sale comes on the back of the disposal of 80% of Amena, Auna’s wireless business, to France Telecom for an enterprise valuation of €10.6bn. (See page 6.)
Merrill Lynch conducted the auction for both sides of Auna, which is owned by Santander Central Hispano and utilities Endesa and Unión Fenosa. Santander also owns 22% of Ono, with other shareholders in the business including Quadrangle, General Electric, Bank of America, Caisse de Depot et Placement du Quebec, Ferrovial and VAL Telecomunicaciones.
The price agreed by Ono, which was advised by JP Morgan and Linklaters, was slightly lower than initial estimates of about €2.5bn. This reflected a lack of interest among buyers for this side of the business on it own. The price achieved for Auna in total was around €13bn, which is consistent with the vendors’ expectations.
Eugenio Galdon, president of Ono, said the merger would improve services and prices for Spanish customers. The merged entity is expected to serve about 1.9m customers and would have had €888m in combined revenues in January–June 2005, according to local reports, although its potential reach is up to 6m homes.
The deal would provide Ono with almost fully comprehensive coverage in Spain by merging Auna’s 10,000km fibre-optic network covering the north and south-east of the country with its own 15,000km of cables in the east and south-west of Spain.