15th Mar 2005 13:29
Vodafone Group Plc15 March 2005 15 March 2005 VODAFONE TO ACQUIRE CONTROL OF MOBIFON IN ROMANIA AND OSKAR IN THE CZECH REPUBLIC Vodafone today announces that its wholly-owned subsidiary Vodafone InternationalHoldings B.V. has entered into agreements with Telesystem International WirelessInc. ("TIW") of Canada to acquire approximately: • 79% of the share capital of MobiFon S.A. ("MobiFon") in Romania. This will increase Vodafone and its subsidiaries' ("Vodafone Group") ownership in MobiFon to approximately 99%; and, • 100% of the share capital of Oskar Mobil a.s. ("Oskar") in the Czech Republic for a cash consideration of approximately US$3.5 billion (£1.8 billion) to besatisfied from Vodafone Group's cash resources (the "Transaction"). In addition,Vodafone Group will be assuming approximately US$0.9 billion (£0.5 billion) ofnet debt. Commenting on the acquisitions, Arun Sarin, Chief Executive of Vodafone, said: "I am delighted that MobiFon and Oskar, both fast growing mobile operators, willbecome part of Vodafone, where they will benefit fully from the global servicesand scale benefits that our group can deliver. These acquisitions will createvalue for our shareholders and will be good for our customers. They are alsoconsistent with our stated strategy of increasing investment in Central andEastern Europe." The Transaction will be immediately enhancing to adjusted earnings per sharebefore acquired intangible amortisation and synergies, will have no impact onVodafone's share purchase programme and is not expected to affect Vodafone'scredit ratings. The principal benefits to Vodafone Group are: • Expansion of its controlled footprint into two attractive European markets - adjacent to existing Vodafone Group markets - combined population of around 32 million - strong growth economies • Control of MobiFon, a leading operator in Romania - mobile penetration of approximately 47% - 4.9 million customers, equivalent to 48% market share - revenues of US$723 million, delivering 30% growth year-on-year - EBITDA of US$345 million with 48% EBITDA margin • Control of Oskar, the fastest growing operator in the Czech Republic - 1.8 million customers, equivalent to 17% market share - market leading ARPUs (US$25) resulting in revenue share of around 20% - revenues of US$552 million, delivering 35% growth year-on-year - EBITDA of US$162 million with 29% EBITDA margin • Additional value to be created from operational enhancements, through the integration of MobiFon and Oskar into the Vodafone Group and participation in the One Vodafone programme, including: - global procurement and the deployment of Vodafone products and services - network design and planning, shared service platforms, supply chain management and roaming The Board of TIW is recommending that its shareholders vote in favour of theTransaction. Certain shareholders of TIW (namely certain affiliates of J.P.Morgan Partners LLC, Caisse de depot et placement du Quebec, and AIG EmergingEurope Infrastructure Fund L.P.), who collectively own 33.6% of TIW'soutstanding share capital, have entered into agreements to vote in favour of theTransaction and not to solicit any competing transaction. The Transaction is conditional on TIW shareholder approval, the receipt of allnecessary unconditional regulatory and Canadian Court approvals and certaincustomary conditions. The Transaction is expected to complete in the thirdquarter of 2005. A termination fee of US$110 million will be payable to Vodafone Group by TIW ifthe TIW Board withdraws or adversely modifies its recommendation of theTransaction and in certain other customary circumstances. UBS Investment Bank is acting as sole financial adviser to Vodafone Group Plcand Vodafone International Holdings B.V. - ends - For further information: Vodafone GroupSimon Lewis, Group Corporate Affairs DirectorTel: +44 (0) 1635 673310 Investor Relations Media RelationsCharles Butterworth Bobby LeachDarren Jones Ben PadovanSarah MoriartyTel: +44 (0) 1635 673310 Tel: +44 (0) 1635 673310 Notes to Editors About Vodafone Vodafone is the world's leading mobile telecommunications company withoperations in 26 countries across 5 continents with 416 million venturecustomers and 152 million proportionate customers worldwide as at 31 December2004. For further information, please visit www.vodafone.com. About Vodafone International Holdings B.V. Vodafone International Holdings B.V. is an indirectly wholly-owned subsidiary ofVodafone, incorporated in the Netherlands. It acts as a holding company withinthe Vodafone Group and currently holds interests in a number of Vodafonesubsidiaries. About TIW and ClearWave TIW is a Canadian company whose principal assets are its indirect interests inMobiFon and Oskar with more than 6.7 million subscribers as of 31 December 2004.TIW operates in Romania through MobiFon under the brand name Connex and in theCzech Republic through Oskar under the brand name Oskar. TIW's shares are listedon NASDAQ ("TIWI") and on the Toronto Stock Exchange ("TIW"). Vodafone Group will acquire control of MobiFon and Oskar through the acquisitionof 99.99% of the outstanding shares in ClearWave N.V. ("ClearWave"). ClearWaveis the 99.99% owned subsidiary of TIW, incorporated in the Netherlands, whichacts as a holding company within the TIW Group and indirectly owns 100% of theoutstanding share capital of Oskar and 79% of the outstanding share capital ofMobiFon. As at 31 December 2004, ClearWave had net debt of US$0.9 billion. Forfurther information, please visit www.tiw.ca. About MobiFon MobiFon is a leading operator in Romania with 4.9 million subscribers as of 31December 2004 of which 34% were post-paid. Vodafone Group currently owns 20.1%of the outstanding share capital of MobiFon. MobiFon operates under the brandname Connex, holds a GSM licence and has been awarded a UMTS licence. Forfurther information, please visit www.connex.ro. About Oskar Oskar is the number three operator in the Czech Republic with 1.8 millionsubscribers as of 31 December 2004 of which 48% were post-paid. Oskar operatesunder the brand name Oskar and holds GSM and UMTS licences. For furtherinformation, please visit www.oskarmobil.cz. Important information Adjusted earnings per share represent earnings per share under IFRS before theresults of discontinued operations, non-operating income and expenditure, anditems not reflecting underlying business performance. Figures for TIW, MobiFonand Oskar are for the 12 months ending 31 December 2004 extracted from TIW'sfourth quarter 2004 financial results announcement of 22 February 2005. Growthrates quoted are in US$ terms. For illustrative purposes an exchange rate of US$1.93:£1 has been used. This press release has been issued by Vodafone Group Plc and is the soleresponsibility of Vodafone Group Plc. UBS Limited ("UBS Investment Bank" or "UBS"), is acting exclusively for VodafoneGroup Plc and Vodafone International Holdings B.V. and no one else in connectionwith the Transaction and will not be responsible to anyone other than VodafoneGroup Plc and Vodafone International Holdings B.V. for providing the protectionsafforded to clients of UBS or for giving advice in relation to the Transactionor any other matters referred to in this press release. This press release does not constitute, or form part of, any offer or invitationto sell, or any solicitation of any offer to purchase any security in anyjurisdiction, nor shall it (or any part of it) or the fact of its distributionform the basis of, or be relied on in connection with, any contract thereafter. CAUTIONARY STATEMENT REGARDING FORWARD - LOOKING STATEMENTS This press release contains certain "forward-looking statements" with respect toour expectations and plans, strategy, management's objectives, futureperformance, costs, revenues, earnings and other trend information, includingstatements relating to expected benefits associated with the Transaction, planswith respect to the Transaction, and expectations with respect to long-termshareholder value growth and the actions of credit rating agencies. By theirnature, forward-looking statements are inherently predictive, speculative andinvolve risk and uncertainty because they relate to events and depend oncircumstances that will occur in the future. Forward-looking statements aresometimes, but not always, identified by their use of a date in the future orsuch words as "anticipates", "aims", "due", "could", "may", "should", "will","expects", "believes", "intends", "plans", "targets", "goal" or "estimates". There are a number of factors that could cause actual results and developmentsto differ materially from those expressed or implied by these forward-lookingstatements. These factors include, but are not limited to: regulatory approvalsthat may require acceptance of conditions with potential adverse impacts; riskinvolving our ability to realise expected synergies and benefits associated withthe Transaction, including benefits associated with 3G, GPRS and Vodafone live!TM and other services; the impact of legal or other proceedings; the risk thatARPUs may decline or may decline more dramatically than expected; the risk thatcredit rating agencies downgrade or give other negative guidance with respect toour debt securities which may increase our financing costs; and the risk that,upon obtaining control of ClearWave, we discover additional information relatingto its business leading to restructuring charges or write-offs or with othernegative implications. Please refer to documents Vodafone Group Plc has filed under the US SecuritiesExchange Act of 1934, including the Annual Report on Form 20-F for the yearended 31 March 2004 filed with the US Securities and Exchange Commission (andavailable at the US Securities and Exchange Commission's Internet site (http://www.sec.gov), for additional factors, risks and uncertainties that could causeactual results and developments to differ materially from the expectationsdisclosed or implied within forward-looking statements. All written or oralforward-looking statements attributable to Vodafone Group Plc, any members ofVodafone Group or persons acting on our behalf are expressly qualified in theirentirety by the factors referred to above. Vodafone Group Plc does notundertake, and specifically disclaims, any obligation to update or revise theseforward-looking statements, whether as a result of new information, futuredevelopments or otherwise. 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