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Acquisition of ntl:Broadcast |
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02 December 2004 Macquarie Communications Infrastructure Group (MCG) today announced that a consortium led by MCG and including Macquarie Bank Limited, Industry Funds Management (Nominees) Limited (IFM) and other third party investors (Consortium) has been selected as the successful bidder for the acquisition of National Transcommunications Limited and NTL Digital Limited (together “ntl:Broadcast”). ntl:Broadcast is one of the leading independent owners and operators of broadcast transmission and site leasing infrastructure in the UK market, with access to more than 3,000 sites providing comprehensive coverage to 99% of the UK population. It is the leading provider of broadcast transmission services to commercial television and radio broadcasters in the UK with customers including the major commercial television and radio broadcasters and wireless telecommunications operators. It also operates the second largest independent portfolio of wireless towers and sites available for lease in the UK and is the largest provider of managed radio communications services to emergency services organisations across the UK and Republic of Ireland. The Consortium has entered into an agreement with ntl Group Limited under which it will acquire 100% of its wholly owned broadcast division for ₤1.27 billion (A$3.11 billion). MCG will acquire a 54% interest in ntl:Broadcast. The acquisition price represents a prospective EV/EBITDA multiple of 12.2x the EBITDA forecast for the year to 30 June 2005. MCG’s Chief Executive Officer, Mr Scott Davies, said the Consortium is pleased to have been selected as the successful bidder to acquire such a well known and well positioned asset as ntl:Broadcast. “Strong customer relationships and significant investment in networks and market leading technology have ensured the strength of ntl:Broadcast’s position in the UK market, and mean that the business is well placed for future growth from Digital Switch Over, new 3G networks, technology upgrades and broader service offerings. “Importantly, with medium and long term contracts in place with the majority of ntl:Broadcast’s customers, on terms of up to 10 years, the ntl:Broadcast business is expected to continue to deliver stable and predictable cashflows to the Consortium investors.” Mr Davies said that, for MCG, the acquisition is a significant step, marking the expansion and diversification of its infrastructure portfolio beyond Australia and into the European market place. “The acquisition and accompanying cashflows from ntl:Broadcast complement the strong performance to date and solid outlook for Broadcast Australia. Together they create a valuable portfolio of assets for MCG security holders,” Mr Davies said “As a result, MCG has reconfirmed its existing distribution forecast of 28.8 cents per stapled security for the 2005 financial year and increased by 9% its preliminary guidance for the 2006 financial year from 33.0 cents to 36.0 cents per security. “The acquisition will also significantly increase MCG’s market capitalisation to around A$1.8 billion post capital raising, providing scope for broadening the shareholder base and improving the liquidity of MCG securities.” The agreement between the Consortium and the ntl Group comprises a put/call arrangement designed to facilitate the completion of the transaction, which is currently expected to occur in early 2005. The Consortium has been advised by Macquarie Bank Limited. The ConsortiumThe Consortium comprises MCG, Macquarie Bank Limited and other third party investors including IFM, Challenger Life No. 2 Limited, MTAA Superannuation Fund (NTL Broadcast) Utilities Pty Ltd, Dian Wijaya Sdn Bhd, Macquarie Global Infrastructure Fund II and clients of Macquarie Private Bank. The Consortium will fund the acquisition of ntl:Broadcast through a combination of equity and shareholder loans from Consortium members. The sources and uses of funds are outlined in the following table:
MCG Acquisition FundingMCG’s 54% interest in ntl:Broadcast, and associated costs, will be funded through a A$920 million capital raising comprising a A$800 million rights offer and a minimum A$120 million placement, with the actual funds to be raised under the placement dependent on the final placement price. The rights offer will be structured as a RAPIDTM (Renounceable Accelerated Pro-rata Offer with Dual-bookbuilds), a renounceable offer to MCG stapled security holders who are residents and registered holders of Australia and New Zealand. Eligible stapled security holders will be entitled to subscribe for 1 stapled security for every 1 stapled security held at 5.00pm on Wednesday 8 December 2004 (Record Date). Eligible stapled security holders renouncing their entitlement and ineligible stapled security holders will be entitled to have their entitlement sold by the Joint Lead Managers through a bookbuild process. The rights to subscribe for new stapled securities will not be tradeable on ASX. Institutional holders will decide whether to take-up or renounce their entitlement as part of an accelerated process being conducted between Thursday 2 to Friday 3 December 2004. A bookbuild will then be held on Monday 6 December 2004 to sell the renounced and ineligible entitlements of institutional stapled security holders on their behalf, as well as the securities to be issued under the placement. A second bookbuild, of renounced and ineligible retail entitlements, will be conducted on Wednesday 19 January 2005 after the close of the retail rights offer. The retail rights offer is expected to open on Wednesday 15 December 2004, with an early close scheduled for Tuesday 21 December 2004 and final close on Friday 14 January 2005. Eligible MCG security holders can expect to receive further information about the rights offer following the lodgement of the offer prospectus and product disclosure statement (Prospectus) with the Australian Securities and Investment Commission, expected to occur on Monday 6 December 2004. (The Prospectus will be made available when the offer of stapled securities to retail holders is made (and can be obtained from MCG at that time). Anyone wishing to acquire the stapled securities will need to complete the application form that will be in or will accompany the Prospectus. A person should consider the Prospectus in deciding whether to acquire, or to continue to hold, the stapled securities.) Macquarie Bank currently owns 31.5% of MCG. Macquarie Bank wishes to maintain the dollar amount of its investment in MCG. Accordingly, it does not intend to take up its rights, except to the extent of investing the expected proceeds from the sale of its rights. Stapled securities issued under the rights offer and the placement will not be entitled to any distribution payable for the six months to 31 December 2004 but will rank equally for all subsequent distributions declared. MCG has appointed Macquarie Equity Capital Markets (MECM), Credit Suisse First Boston and UBS AG, Australia Branch as Joint Bookrunners, Lead Managers and Underwriters for the capital raising. MECM is the Sole Structurer of the RAPIDTM offer. Proposed Restructure of MCGIn order to acquire ntl:Broadcast through a structure which offers an appropriate foreign base for acquisitions outside of Australia, MCG is proposing a restructure (Restructure). The Restructure is expected to occur as soon as is practicable after the completion of the rights offer. The Restructure will involve a transfer from Macquarie Communications Infrastructure Trust (MCIT) of shares in Macquarie Communications Infrastructure Bermuda Limited (MCIBL), a company incorporated in Bermuda which will be the indirect holding company of MCG’s investment in ntl:Broadcast. The transfer will be on a one for one basis as a distribution in-specie, creating a triple stapled security. Such a Restructure is contemplated in the constitutions of Macquarie Communications Infrastructure Limited, MCIT and MCIBL and no approval is required from stapled security holders. For further information, please contact:
Richard Nelson
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