Allen & Overy has advised Deutsche Bank, ING and UniCredit as bookrunners and underwriters in connection with the debt financing for the EUR5 billion acquisition of Vodafone Holdings Europe, S.L.U. (Vodafone Spain) by Zegona Communications plc (Zegona). The financing marks one of the largest committed financings of its kind in Europe this year.
The debt financing comprises a EUR500 million term loan A facility, a EUR3.7 billion corporate bridge facility and a EUR500 million revolving credit facility. In addition, the acquisition is expected to be funded by up to EUR900 million of financing from Vodafone via preference shares, as well as up to EUR600 million of equity to be raised by Zegona, in part to reduce the corporate bridge facility.
Darren Hanwell, banking partner at Allen & Overy, commented: “We are really excited to have supported our clients on this innovative and high-profile transaction, which combines our market-leading expertise in bank debt, capital markets and telecom.” John Kicken, capital markets partner at Allen & Overy, added: “It’s encouraging to see the increased underwriting appetite among investment banks to once again facilitate big-ticket M&A activity.”
Zegona was established in 2015 with the objective of investing in businesses in the European TMT sector and improving their performance to deliver attractive shareholder returns. The acquisition of Vodafone Spain, which is the third-largest telecommunications company in the country, marks Zegona’s third deal in Spain after successful turnarounds at Telecable and Euskaltel.
Zegona is admitted to the standard listing segment of the Official List and to trading on the Main Market of the London Stock Exchange. Completion of the acquisition is conditional on certain approvals being obtained from Zegona shareholders as well as regulatory clearances. Upon completion, the acquisition is expected to represent the largest reverse takeover ever concluded on the London Stock Exchange.
The A&O finance team was led by London partners Darren Hanwell, John Kicken and Alice Smith, assisted by senior associates Jennifer Spring and Adam Walsh, associates Sampada Bannurmath, Isidora Parga, Andreas Georgiades and Luke Barratt, and trainee Deborah Wathome. The Madrid team was led by partner Juan Hormaechea, assisted by senior associate Sara Sanz and associate Laura Cabezas. Tax advice was provided by partner Esther Lemmon in London and counsel Ishtar Sancho in Madrid.
