DGAP-News: Tele Columbus AG / Key word(s): Offer/Capital Increase 
Tele Columbus AG: Tele Columbus focuses on delivering on its planned fiber 
expansion together with Morgan Stanley Infrastructure Partners and United 
Internet 
 
2020-12-21 / 07:30 
The issuer is solely responsible for the content of this announcement. 
 
*PRESS RELEASE* 
 
Significant capital injection and takeover offer: 
 
*Tele Columbus focuses on delivering on its planned fiber expansion together 
with Morgan Stanley Infrastructure Partners and United Internet* 
 
- Tele Columbus AG wins Morgan Stanley Infrastructure Partners as partner 
for implementation of Fiber Champion strategy 
 
- Kublai GmbH, an affiliate of funds advised by Morgan Stanley 
Infrastructure Inc., announces voluntary public takeover offer at EUR 3.25 
per Tele Columbus share; Tele Columbus supports the offer 
 
- Anchor shareholder United Internet AG will contribute minority interest of 
29.90 percent to the Bidder if takeover offer is successful 
 
- Extraordinary General Meeting convened with resolution on capital increase 
through Rights Offering in amount of EUR 475 million; Bidder guarantees 
capital increase 
 
- Further equity capital of up to EUR 75 million committed by Bidder for 
implementation of Fiber Champion strategy 
 
- Pre-contract signed with 1&1 Drillisch AG to conclude a wholesale 
agreement for broadband lines 
 
Berlin, 21 December 2020. Tele Columbus AG (ISIN: DE000TCAG172, WKN: TCAG17, 
"Tele Columbus", "the Company"), one of Germany's leading fiber network 
operators, has won Morgan Stanley Infrastructure Partners as a partner to 
implement its Fiber Champion strategy by concluding an investment agreement 
with UNA 422. Equity Management GmbH (in the future: Kublai GmbH). Kublai 
GmbH (the "Bidder") is a bidding company backed by Morgan Stanley 
Infrastructure Partners, a long-term oriented infrastructure investor. 
Today, Kublai GmbH announced a voluntary public takeover offer at a price of 
EUR 3.25 per Tele Columbus share, which Tele Columbus supports. The offer 
price corresponds to a premium of 37.5 percent on the volume-weighted 
three-month average price of the Tele Columbus share on 18 December 2020 and 
a premium to the share price before the day of the AGM invitation (07 
December) of 41.3%. 
 
United Internet has agreed to contribute its indirect stake of approximately 
29.90 percent in Tele Columbus to the Bidder if the takeover offer is 
successful. As shareholders of the Bidder, Morgan Stanley Infrastructure 
Partners and United Internet will support Tele Columbus in implementing the 
Fiber Champion strategy. Rocket Internet, which holds approximately 13.36 
percent of the shares in Tele Columbus, also supports the takeover offer and 
signed an irrevocable commitment to tender its shares into the offer. 
 
At an Extraordinary General Meeting on 20 January 2021, a capital increase 
through a Rights Offering in the amount of EUR 475 million and an authorized 
capital are to be resolved. The Bidder has guaranteed the amount of the 
capital increase in the Investment Agreement subject to successful 
completion of the offer. Subject to the subscription rights of other 
shareholders, the Bidder will subscribe for enough shares to ensure that the 
amount of EUR 475 million will be reached in any case. The Bidder has also 
agreed to provide further equity of up to EUR 75 million in the future for 
the implementation of the Fiber Champion strategy. 
 
The Management Board and the Supervisory Board of Tele Columbus welcome the 
takeover offer and intend to recommend to the shareholders of Tele Columbus 
to accept the takeover offer. In the opinion of the Management Board and 
Supervisory Board, the takeover offer reflects the inherent value of the 
shares and includes an attractive premium to the volume-weighted average 
price of the last three months. This transaction will enable Tele Columbus 
to deliver on its planned expansion of its superior fiber-based 
infrastructure in the interest of customers and partners, make the company 
more sustainable in the future and thus secure jobs. 
 
The Bidder supports the existing management of Tele Columbus. No changes in 
the Tele Columbus Management Board are planned. Following the completion of 
the transaction, the Bidder shall be represented on the Supervisory Board in 
accordance with its stake in Tele Columbus. A domination agreement is not 
planned. 
 
The acceptance period of the offer is to be six weeks. The takeover offer is 
expected to close in the second quarter of 2021, subject to regulatory 
approvals. The key offer conditions are a minimum acceptance threshold of 50 
percent, waivers by bond and loan creditors of termination rights due to 
change of control in sufficient numbers, and regulatory approvals. 
 
"In a structured bidding process, we have found an excellent partner in 
Morgan Stanley Infrastructure Partners, which is also supported by our 
existing anchor shareholder United Internet. This will enable us to reduce 
our debt and provide new capital to implement our Fiber Champion strategy in 
the interest of our customers and partners. Furthermore, Tele Columbus will 
remain a standalone company. The takeover offer allows our shareholders to 
tender their shares to the Bidder at an attractive consideration. In 
alternative scenarios, all shareholders would have had to inject additional 
capital themselves in order to implement the Fiber Champion strategy and to 
ensure Tele Columbus' competitiveness in the long term," says Dr. Daniel 
Ritz, Chief Executive Officer (CEO) of Tele Columbus AG. 
 
"We support the Fiber Champion strategy and the management of Tele Columbus 
and are pleased to provide the financing for the implementation of the 
strategy and the further fiber expansion. We see our stake as a long-term 
investment and will accompany the future course of Tele Columbus as a 
standalone company," says Christoph Oppenauer, Executive Director at Morgan 
Stanley Infrastructure Partners. 
 
Ralph Dommermuth, Chief Executive Officer of United Internet AG, adds: "As 
an anchor shareholder, we welcome the fact that Tele Columbus has found a 
sustainable solution to create a solid capital structure that will allow the 
Management Board to successfully implement the Fiber Champion strategy. We 
look forward to the future long-term partnership cooperation with Tele 
Columbus and Morgan Stanley Infrastructure Partners." 
 
*Capital increase of EUR 475 million planned; further equity capital 
committed by Bidder of up to EUR 75 million * 
 
Tele Columbus intends to have a capital increase through a Rights Offering 
in the amount of EUR 475 million resolved at an Extraordinary General 
Meeting on 20 January 2021, which is to be carried out after the completion 
of the takeover offer. The subscription price shall be determined closer to 
the time of the rights offering and will not exceed the offer price. The 
resolution requires the approval of a simple majority of the capital 
represented at the time of the resolution. The Rights Offering shall be 
completed as soon as possible after the successful completion of the 
takeover offer. The Bidder has also agreed to make available additional 
equity capital of up to EUR 75 million after completion of the transaction 
for the implementation of the Fiber Champion strategy. 
 
*Reduction of net debt also in the interest of lenders* 
 
The transaction is expected to significantly reduce the net debt of Tele 
Columbus. It is expected that this will lead to a better risk assessment of 
the outstanding loans and bonds. "We believe that this transaction is also 
in the best interest and to the benefit of our lenders and bondholders as 
the company's debt ratio will be significantly reduced due to the 
substantial equity injection. This in turn will considerably improve the 
company's credit rating and thus the risk structure of the lenders," says 
Eike Walters, CFO of Tele Columbus AG. 
 
*Fiber champion strategy: Wholesale pre-contract with 1&1 Drillisch* 
 
With a sustainably strengthened capital base, Tele Columbus will be able to 
deliver on its plans for fiber infrastructure expansion in Germany as part 
of the Fiber Champion strategy. Over the next ten years, Tele Columbus plans 
to invest almost EUR 2 billion in network infrastructure and fiber 
expansion. Currently, 2.4 million households are connected to Tele Columbus' 
broadband network. By 2030, approximately 2 million households are to be 
supplied with gigabit bandwidths via fiber optic networks. 
 
Part of the Fiber Champion strategy is also to attract additional wholesale 
partners. This weekend, Tele Columbus has signed a binding pre-contract with 
1&1 Drillisch for the utilization of Tele Columbus' fiber network for the 
marketing of their own broadband products. The wholesale pre-contract is 
subject to the successful execution of the takeover offer. A wholesale 
agreement with Telefónica Deutschland has been in force since October 2019 
and is currently being implemented. 
 
"Further expansion of wholesale partnerships is an important part of our 
Fiber Champion strategy to drive forward the expansion of fiber-based 
broadband in Germany. This will increase network utilization and helps us 
secure additional funds for investments. Our housing clients and their 
tenants will benefit from an even greater variety of products," says Dr. 
Daniel Ritz. 
 
Tele Columbus is being advised on the transaction by BofA Securities and 
Kirkland & Ellis. 
 
Analyst and investor webcast today (21 December 2020) at 12:30pm CET, click 
here [1]. 
 
*** 
 
About Tele Columbus 
 
Tele Columbus AG is one of Germany's leading fibre network operators, which 
reaches more than three million homes. Through its brand PYUR, the Company 
offers high-speed internet including telephony and more than 250 TV channels 
on a digital entertainment platform that combines linear TV with video on 
demand entertainment. To its housing association partners the Tele Columbus 
Group offers tailored models of cooperation and state-of-the-art services

(MORE TO FOLLOW) Dow Jones Newswires

December 21, 2020 01:30 ET (06:30 GMT)