Under the terms of the deal, Providence Equity Partners Inc, Thomas H Lee Partners LP, Quadrangle Group LLC, and JPMorgan Partners, will help finance the takeover by acquiring new Ono shares, and the rest will be paid by taking on debt.
Auna has a fiber-optic network covering nearly 10,000km in Madrid, Barcelona, and much of Spain’s north and south east. Year-end figures for 2004 indicate that these operations posted a net loss of 172m euros ($210m) on revenue of 1.18bn euros ($1.44bn).
The network currently competes with Madrid, Spain-based Ono’s 15,000 km network in the east and south west of Spain.
Together, the combined entity has a much better chance of taking on domestic giant Telefonica SA, which still controls close to 80% of Spain’s fixed-line phone market. Both Ono and Auna’s networks offer phone, internet, and television services over the same connection, and the combined company will have more than 2.2 million residential clients, and will be better placed to offer triple-play services.
The sale of the remaining Auna assets has long been expected. Over the past month Auna’s shareholders were evaluating a number of bids around the 13bn euro ($14.33bn) mark for the entire group. Auna’s leading shareholders include the Spanish power groups Endesa SA and Union Fenosa SA, as well as bank Banco Santander Central Hispano SA.
It is thought the sale was triggered by the desire of Endesa and Union Fenosa to raise cash to cut debt, and in the case of Endesa, to distribute a bonus dividend. In the end however, they obviously decided that selling off pieces of the company would be the profitable way forward.
Last week the group’s mobile operator Amena Movil was sold to France Telecom SA for 10.6bn euros ($12.9bn) including debt. With a 24% market share, Amena Movil is Spain’s third-largest mobile network behind Telefonica Moviles SA and Vodafone Group Plc.
