Sell tower biz, sell Telia Latvia, buy back shares
Sweden’s Telia Company has sold its 49% stake in its own domestic mobile tower business to a consortium of infrastructure investment firms comprising Brookfield and Alecta, for €524 million (5.5 billion Swedish kroner or $562 million). It also announced the sale of subsidiary Telia Latvia to Tet following an open auction process with the sale of ‘100 percent of the shares’ raising €10.75 million. In another release, it has outlined details of a Share Buy Back programme.
Strategy
“We are delivering on our strategy to both develop and crystalise the value of our digital infrastructure, and I am delighted that we have Brookfield and Alecta as our tower partners in Norway, Finland and now in Sweden,” said Allison Kirkby, Telia Company President and CEO, about the divestment of mast assets. The price of the Telia Latvia sale represents an enterprise value (EV) of over ten times the earnings before interest, taxes, depreciation, and amortisation (EBITDA), whereas the EV/EBITDA for the S&P 500 has typically averaged between 11 and 16 over the last few years.
Tet
The agreement to sell Telia Latvia to Tet was announced on January 4, 2022. “With this acquisition, Tet strengthens its position within the enterprise segment given Telia Latvia’s network, technology assets and highly skilled employees,” said Andreas Ekström, Telia Company’s head of Latvia. “Latvia is an interesting ICT market and Telia remains committed to continue contributing to the digitalization of Latvia through our engagement in Tet and LMT.”
Shares buy back
The Telia buy-back programme will be managed by an investment firm/credit institution that makes independent trading decisions over the timing of the purchase of Telia Company’s shares, said Telia. Under the scheme repurchases will be made on Stockholm Nasdaq in accordance with its Rule Book for Issuers, MAR and the Safe Harbour Regulation. The share repurchases will start on June 15, 2022, and purchasing will be finalised by February 28, 2023, at the latest. The maximum amount to be used for repurchases during the period is €520 million (SEK 5.4 billion). Payment for the shares will be made in cash.
Mandate
The investor mandated by Telia Company to execute the repurchases on its behalf will be budgeted to carry out repurchases for a minimum amount each full calendar month that the repurchase programme is ongoing. A maximum number of shares may be repurchased so that Telia Company’s total holding at any time does not exceed 10 per cent of Telia Company’s total number of issued shares. The total number of issued shares in Telia Company currently amounts to 4,089,631,702. Telia Company’s holding of own shares were 312,837 as per May 31, 2022.