Yell Group buys out Spanish firm TPI

Yell Group buys out Spanish firm TPI

	Published : Fri, 28 Apr 2006 10:40 By : Amy Watts Print this Story

LONDON: Britain's telephone directory publisher Yell Group Plc. is buying Spanish telecom company Telefonica's 59.9 per cent holding in Telefonica Publicidad e Informacion SA (TPI) for 3.07 billion euros.

Yell, which owns the Yellow Pages in Britain, said Friday it has agreed to pay Telefonica 8.5 euros in cash for each TPI share. The company will also assume about 220 million euros of debt. It has offered to pay the same price for the rest of TPI.

Telefonica had put its majority-owned telephone directory business on auction earlier this month and Yell is the only remaining bidder for the stake. Under the terms of the deal, Telefonica can break up the agreement if a competing offer of more than 9.35 euros a share came through.

The offer is at 4.9 per cent discount on Madrid-based TPI's closing price Thursday, but at a premium of 22 per cent on its average price for the three months prior to 18 January, when the bid process had started.

Reading-based Yell said in a statement that the acquisition is expected to be earnings enhancing in the first full year after completion and deliver a return on capital in excess of 8 per cent by the fourth full year. It is a "substantial and complementary extension" of its existing business, the company added.

Yell intends to fund the acquisition through a combination of new secured credit facilities available after a full refinancing of its existing borrowings and the net proceeds of a proposed equity placing of around 350 million pounds.

The deal is conditional on Yell's shareholders approving it, an authorisation of the Spanish market regulator CNMV and other regulatory approvals.

Yell is a spin-off of the former monopoly BT Group Plc. It has expanded in the U.S. through acquisitions, including TransWestern Holdings LP last year for $1.6 billion. The buyout of TPI will add Spain, Brazil, Chile, Peru and Argentina to the 46 U.S. states in which Yell publishes directories.

Yell shares closed at 529-1/2 pence Thursday, valuing the group at around 3.7 billion pounds. TPI's shares closed, down 1.7 per cent, at 8.79 euros.