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 voluntary public acquisition offer in the form of a partial offer to the shareholders of Telefónica Deutschland Holding AG, to acquire up to approximately 18.52% of Telefónica Deutschland shares, which are not already held by Telefónica. The acceptance period commences today and will end on 17 January 2024, 24:00 (CET), unless extended.

Highly attractive premium for Telefónica Deutschland shareholders
With the best and final offer price of EUR 2.35 per share, Telefónica provides all existing minority shareholders with an attractive, secure and timely opportunity to access liquidity at a significant premium at a time when Telefónica Deutschland is focused on its commitment to continue delivering sustainable growth and efficiencies. The offer price represents a premium of 37.6% to the closing share price on 6 November 2023 (the day prior to the public announcement of the intention to make the Offer) and a premium of 36.3% to the then-preceding 3-months volume-weighted average price.

Given that the Offer is not subject to a minimum acceptance threshold and no regulatory approval is needed for this transaction to be completed, the Offer will settle shortly after the expiry of the acceptance period. Payment of the offer price will thus take place prior to the fiscal year 2023 dividend payment of EUR 0.18 per share, which is expected to be paid in May 2024. For fiscal year 2024 and subsequent years, Telefónica intends to promote a revision of the current Telefónica Deutschland dividend policy in order to establish a more conservative financial policy that will better support the current Telefónica Deutschland strategy.

Telefónica Deutschland to remain a Munich-based telecom powerhouse
The Offer reinforces Telefónica’s strategy to focus on its core geographies (Spain, Brazil, Germany and the UK). It is a strong commitment to the German market, one of the most attractive and stable telecom markets in Europe, and a strong sign of confidence in Telefónica Deutschland’s long-term potential. Telefónica Deutschland will continue to be a Munich-based telecom powerhouse managed independently under the umbrella of the Telefónica group. Telefónica has full confidence in the current members of the management board of Telefónica Deutschland and intends to continue to work closely with them. There are no intentions to make any changes with respect to the employees of Telefónica Deutschland, their employment conditions, or their employee representation.

No structural measures required to achieve strategic agenda
As a publicly-listed majority owner of Telefónica Deutschland – directly and indirectly holding (including instruments that give the right to acquire approximately 1.32% of Telefónica Deutschland’s share capital) approximately 81.48% of shares – Telefónica does not require any structural measures to finance the transaction or achieve its strategic agenda in Germany. Therefore, it has no intention to implement a domination agreement and/or profit and loss transfer agreement.

CT Bureau