The Board of Directors of Tele2 AB (publ) (“Tele2” or “the Company”), (NASDAQ OMX Stockholm: TEL2 A and TEL2 B), has on October 3, 2016, resolved on the rights issue (“Rights Issue”) of approximately SEK 3 billion with preferential rights for existing shareholders, subject to the approval by an Extraordinary General Meeting, previously communicated in conjunction with the announcement of the acquisition of TDC Sweden. NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, HONG KONG, JAPAN, CANADA OR SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL. OTHER RESTRICTIONS ARE APPLICABLE. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THE PRESS RELEASE. The largest shareholder in Tele2, Kinnevik (representing 30.34% of the total number of shares and 47.92% of the number of votes in Tele2 as of August 31, 2016), has committed to subscribe for its pro rata share of the Rights Issue and Nordea Bank AB (publ), has entered into a standby underwriting commitment, subject to customary conditions, for the remaining portion of the Rights Issue. Background and rationale On June 21, 2016, Tele2 announced that the Group has signed a contract to acquire 100 percent of TDC Sweden, subject to regulatory approval by the relevant competition authorities, for SEK 2.9 billion on a cash and debt free basis. TDC Sweden is a highly successful provider of business-to-business (“B2B”) services in Sweden, serving both the public sector and many Swedish blue chip customers with their entire end-to-end connectivity and communication needs. The Board of Directors of Tele2 is of the opinion that the acquisition of TDC Sweden is an important step for Tele2 since it will strengthen the position in the strategically important B2B segment in Sweden. Tele2 estimates annualized run-rate OPEX and CAPEX synergies to amount to approximately SEK 300 million, with additional one-off CAPEX synergies estimated to amount to SEK 200 million. Tele2 also expects positive effects from cross -selling (which are not included in the above synergy estimates). The Company estimates the integration costs and other one-off costs required to achieve synergies to amount to approximately SEK 750 million. The acquisition of TDC Sweden is not conditional upon equity financing as Tele2 has available funds and existing credit facilities in place to finance the acquisition. However, in conjunction with the announcement of the acquisition of TDC Sweden, Tele2 also communicated the intention to undertake an equity issue with preferential rights for existing shareholders to maintain the Company’s financial strength. Terms of the Rights Issue Subject to the approval by an Extraordinary General Meeting on October 27, 2016, Tele2’s Board of Directors has resolved on a Rights Issue of approximately SEK 3 billion before deduction of Rights Issue costs. Tele2’s existing shareholders will have a preferential right to subscribe for new Tele2 shares in the same class in proportion to the number of shares that the holder already owns (primary preferential right). The record date to determine which shareholders are entitled to subscribe with preferential right is October 31, 2016. Shares that are not subscribed for through primary preferential right will be offered to all Tele2 shareholders for subscription (subsidiary preferential right) and other investors who have subscribed for shares without any preferential right. The increase in share capital, the number of shares to be issued and the subscription price in the Rights Issue, is expected to be announced on October 24, 2016, at the latest. The subscription period will run from and including November 2, 2016, up to and including November 16, 2016, or such later date as decided by the Board of Directors. Trading in subscription rights is expected to be conducted at Nasdaq Stockholm during the period from and including November 2, 2016, up to and including November 14, 2016. The resolution by the Board of Directors on the Rights Issue is subject to approval of the Extraordinary General Meeting to be held on October 27, 2016. For more information, please see the notice to attend the Extraordinary General Meeting in a separate press release. Shareholder support and underwriting commitment The largest shareholder in Tele2, Kinnevik (representing 30.34% of the total number of shares and 47.92% of the number of votes in Tele2 as of August 31, 2016), has committed to subscribe for its pro rata share of the Rights Issue. Kinnevik has also committed to vote in favor of the Rights Issue at the Extraordinary General Meeting. For the remaining amount, Nordea Bank AB (publ), have entered into a standby underwriting commitment, subject to customary conditions. Indicative timetable for the Rights Issue +------------------+----------------------------------------------------------+ |October 24, 2016 |Announcement of complete terms and conditions, including | | |subscription price and subscription ratio | +------------------+----------------------------------------------------------+ |October 27, 2016 |Extraordinary General Meeting to approve the Rights Issue | | |resolved by the Board of Directors | +------------------+----------------------------------------------------------+ |October 27, 2016 |Last day of trading in shares including right to | | |participate in the Rights Issue | +------------------+----------------------------------------------------------+ |October 28, 2016 |First day of trading in shares excluding right to | | |participate in the Rights Issue | +------------------+----------------------------------------------------------+ |October 31, 2016 |Record date for participation in the Rights Issue, i.e. | | |holders of shares who are registered in the share register| | |on this day will receive subscription rights for | | |participation in the Rights Issue | +------------------+----------------------------------------------------------+ |November 2, 2016 –|Trading in subscription rights | |November 14, 2016 | | +------------------+----------------------------------------------------------+ |November 2, 2016 –|Subscription period | |November 16, 2016 | | +------------------+----------------------------------------------------------+ |On or around |Press release of preliminary outcome of the Rights Issue | |November 21, 2016 | | +------------------+----------------------------------------------------------+ |On or around |Press release of final outcome of the Rights Issue | |November 23, 2016 | | +------------------+----------------------------------------------------------+ Financial and legal advisors Nordea Bank AB (publ) is acting as financial advisor and Advokatfirman Vinge KB is acting as legal advisor in connection with the Rights Issue. The information was distributed for disclosure at 08:00 CET on October 4, 2016. For more information, please contact: Angelica Gustafsson, Press Inquiries, Tele2 AB, Phone: +46 704 26 41 42 Louise Tjeder, Head of Investor Relations, Tele2 AB, Tel: +46 704 26 46 52 Important information This announcement does not constitute or form part of an offer for sale or solicitation of an offer to purchase or subscribe for securities in the United States or any other jurisdiction. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold, directly or indirectly, in the United States absent registration under or an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Company does not intend to register any portion of this offering in the United States or to conduct a public offering in the United States. Any public offering of securities to be made in the United States will be made by means of a prospectus that will contain detailed information about the Company and its management, as well as financial statements. Copies of this announcement are not being, and should not be, distributed in or sent into the United States. This announcement is for distribution only to and is directed only at persons who (i) have professional experience in matters relating to investments which fall within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Financial Promotion Order”), (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc”) of the Financial Promotion Order, (iii) are outside the United Kingdom, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). This announcement is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this announcement relates is available only to relevant persons and will be engaged in only relevant persons. TELE2 IS ONE OF EUROPE'S FASTEST GROWING TELECOM OPERATORS, ALWAYS PROVIDING CUSTOMERS WITH WHAT THEY NEED FOR LESS. We have 16 million customers in 9 countries. Tele2 offers mobile services, fixed broadband and telephony, data network services, content services and global IoT solutions. Ever since Jan Stenbeck founded the company in 1993, it has been a tough challenger to the former government monopolies and other established providers. Tele2 has been listed on the NASDAQ OMX Stockholm since 1996. In 2015, we had net sales of SEK 27 billion and reported an operating profit (EBITDA) of SEK 5.8 billion. For definitions of measures, please see the last page of the Annual report 2015.
The Board of Directors of Tele2 has decided on an approximately SEK 3 billion rights issue supported by the main shareholder
| Source: Tele2 AB
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