Telefonica Germany in capital hike to pay for E-Plus
Telefonica Deutschland, the German subsidiary of Spanish telecoms group Telefonica, said Tuesday it was planning a capital increase to pay for the acquisition of rival operator E-Plus.
Telefonica Deutschland said in a statement it will issue 1.117 billion new shares at a price of 3.24 euros ($4.17) apiece, raising a total 3.62 billion euros in all.
The funds were "intended to be used to pay the cash consideration for the acquisition of E-Plus," the statement said.
The EU Commission gave the go-ahead to the acquisition in July in a deal estimated at a total 8.5 billion euros, which will merge Germany's third and fourth-biggest telecom operators.
Telefonica Deutschland said that the 3.62-billion-euro capital increase will be means of a so-called rights issue, where the new shares are offered to existing shareholders first in a ratio of one new share for every existing share held.
The subscription period will run from September 10 until September 23.
The Spanish parent Telefonica, which indirectly holds 76.83 percent of Telefonica Deutschland, will exercise its subscription rights in full, the statement said.
© 2014 AFP