February 1, 2018 / 6:40 AM / 7 months ago

BRIEF-Sweden's MTG to sell MTG Nordics business to Danish TDC

Feb 1 (Reuters) - MTG AB:

* CREATING EUROPE’S FIRST FULLY CONVERGENT MEDIA AND COMMUNICATIONS PROVIDER; NEW MTG TO BE A FOCUSED GLOBAL DIGITAL ENTERTAINMENT PROVIDER

* SAYS ‍HAS ENTERED INTO A DEFINITIVE AGREEMENT WITH TDC A/S (“TDC GROUP”) TO COMBINE ITS NORDIC ENTERTAINMENT AND MTG STUDIOS BUSINESSES (TOGETHER “MTG NORDICS”) WITH TDC GROUP​

* SAYS BOARDS OF DIRECTORS OF BOTH MTG AND TDC GROUP RECOMMEND THEIR RESPECTIVE SHAREHOLDERS TO VOTE IN FAVOUR OF COMBINATION

* SAYS KINNEVIK AB, WHICH OWNS 20.0% OF CAPITAL AND 47.6% OF VOTES IN MTG, HAS EXPRESSED ITS FULL SUPPORT FOR COMBINATION

* SAYS ‍COMBINATION IS EXPECTED TO CREATE SUBSTANTIAL SYNERGIES, AN IMPROVED GROWTH AND EARNINGS PROFILE, AND HIGHER SHAREHOLDER RETURNS​

* SAYS CEO OF TDC GROUP, PERNILLE ERENBJERG, WILL BECOME CEO OF NEW COMBINED COMPANY

* SAYS COMBINATION IMPLIES A VALUATION OF MTG NORDICS OF SEK 19.55 BILLION ON A CASH AND DEBT FREE BASIS

* SAYS ‍COMBINATION IS EXPECTED TO YIELD ANNUAL RUN RATE SYNERGIES OF APPROXIMATELY DKK 600 MILLION (SEK 790 MILLION), OF WHICH DKK 400 MILLION (SEK 530 MILLION) ARE OPEX AND CAPEX RELATED, AND WHICH ARE EXPECTED TO BE GRADUALLY REALISED OVER 3 YEARS UP TO END OF 2021​

* SAYS MTG WILL ALSO RECEIVE AN ADDITIONAL CASH COMPONENT CORRESPONDING TO PRO RATA SHARE OF TDC GROUP’S ANNOUNCED 2017 DIVIDEND OF DKK 1.05 PER SHARE, EQUIVALENT TO APPROXIMATELY SEK 430 MILLION

* SAYS ‍COMBINED COMPANY WILL HAVE AN IMPROVED FINANCIAL POSITION (COMPARED WITH TDC GROUP) WITH LOWER COMBINED LEVERAGE OF APPROXIMATELY 2.6X NET DEBT/EBITDA AT YEAR END 2017 AND AN IMPROVED EXPECTED DE-LEVERAGING PROFILE​

* SAYS ‍TDC GROUP HAS ANNOUNCED ITS INTENTION TO PAY OUT DKK 1.40 OR APPROXIMATELY 50% OF PROJECTED EQUITY FREE CASH FLOW FOR 2018, SUBJECT TO CLOSING OF COMBINATION​

* SAYS ‍COMBINATION IS EXPECTED TO BE COMPLETED DURING SECOND HALF OF 2018 AND IS SUBJECT TO APPROVAL BY AGMS OF SHAREHOLDERS OF MTG AND TDC GROUP, AS WELL AS APPROVALS FROM RELEVANT REGULATORY AUTHORITIES​

* SAYS MTG TO TRANSFER MTG NORDICS ON A CASH AND DEBT FREE BASIS TO TDC GROUP IN EXCHANGE FOR 309 MILLION NEWLY ISSUED TDC SHARES AND A CASH AMOUNT OF SEK 3.3 BILLION Source text for Eikon: Further company coverage:

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