Acceptance period for Telefónica Deutschland shareholders commences

Telefónica, S.A., through Telefónica Local Services GmbH, a wholly-owned subsidiary of Telefónica, has published the offer document for a public delisting acquisition offer for Telefónica Deutschland Holding AG, to acquire all non-par value registered shares in Telefónica Deutschland not yet directly held by the Bidder (the “Delisting Offer”). The acceptance period commences today and will end on 18 April 2024, 24:00 (CEST).

After successfully increasing its ownership to 94.74%, and given limited liquidity of the Telefónica Deutschland Shares, Telefónica and the Bidder believe that the delisting of Telefónica Deutschland is the next logical step from an economic, strategic and operational standpoint to simplify the group’s structure and implement Telefónica’s strategic agenda together with Telefónica Deutschland in a more agile manner.

Telefónica Deutschland will continue to be a Munich-based telecom powerhouse, managed independently under the umbrella of the Telefónica group, with a continued focus on delivering sustainable growth and efficiencies. Consequently, the Bidder and Telefónica have no intentions to implement a domination and/or profit and loss transfer agreement, nor to initiate a squeeze-out.

Highly attractive and final offer for Telefónica Deutschland shareholders
With an offer price of EUR 2.35 per Telefónica Deutschland Share, Telefónica provides all existing minority shareholders with an additional and final opportunity to access liquidity at an attractive price. The offer price represents a premium of 37.6% to the closing share price on 6 November 2023 (the last Trading Day prior to publication of the announcement of the decision to make the previous voluntary partial acquisition offer (the “Partial Offer”) on 7 November 2023) and a premium of 36.3% to the then-preceding 3-months volume-weighted average price.

The Delisting Offer is not subject to any offer conditions and therefore provides maximum deal certainty. The settlement of the Delisting Offer and payment of the offer price to the tendering Telefónica Deutschland shareholders will take place without undue delay following the expiry of the acceptance period.

Trading of Telefónica Deutschland Shares on Frankfurt Stock Exchange will cease with likely effects on trading volumes and liquidity
Upon announcing its decision to launch the Delisting Offer on 7 March 2024, the Bidder also entered into a delisting agreement with Telefónica Deutschland, in which Telefónica Deutschland has undertaken to support the delisting of the Telefónica Deutschland Shares by, inter alia, applying for the revocation of the admission to trading on the Frankfurt Stock Exchange.

Upon the delisting becoming effective, the trading of the Telefónica Deutschland Shares on the regulated market will terminate, regardless of the number of Telefónica Deutschland Shares tendered into the Delisting Offer. The Delisting Offer will likely result in a further reduction of trading volumes in and liquidity of Telefónica Deutschland Shares.

Telefónica does not intend to support dividend payments beyond the already confirmed dividend for the financial year 2023
As announced in the offer document relating to the Partial Offer, the Bidder and Telefónica do not intend to support dividend payments beyond the already confirmed dividend for the financial year 2023. Both intend to evaluate Telefónica Deutschland’s dividend policy over time jointly with Telefónica Deutschland’s management team, provided that neither Telefónica nor the Bidder currently see a need to pay dividends in the future beyond the minimum legally required.

The dividend for the financial year 2023 is expected to be paid after Telefónica Deutschland’s annual general meeting, which will take place several weeks after the settlement of the Delisting Offer and no earlier than mid-June 2024.

CT Bureau