MADRID (AFP) – Shares in Spanish fixed-line operator Jazztel soared over six per cent after French telecom giant Orange made a 3.4-billion-euro bid for the firm against a background of restructuring in the European telecom sector.
Orange, formerly known as France Telecom, said late on Monday it would offer Jazztel shareholders 13 euros per share, 34 per cent above the average closing price of the last 30 trading days.
The company said that the offer, including stock options held by some Jazztel managers, is worth a total of 3.4 billion euros ($4.4 billion).
The offer, which will be formally presented to Jazztel shareholders later on Tuesday, is subject to regulatory approval as well as to winning the backing of at least 50.01 per cent of shareholders.
If successful, the deal would create Spain’s second-biggest fixed broadband carrier and third-biggest mobile network operator.
“We are doing this deal to accelerate our growth in Spain, particularly in fixed-mobile convergent offers,” Orange Chief Executive Stephane Richard said in a statement.
Shares in Jazztel rose 6.02 per cent to 12.77 euros in late morning trading.
By comparison, the benchmark Ibex 35 index of most traded shares fell 0.60 per cent.
Consolidation of the crowded and deeply fragmented European telecom market has intensified over the past year as small players have fallen prey to bigger rivals, reducing the number of operators in each market.