Acquisition

Banco Santander Central Hispano SA 18 December 2001 SANTANDER CENTRAL HISPANO, ENDESA, UNION FENOSA AND ING ACQUIRE TELECOM ITALIA'S 26.89% STAKE IN PHONE OPERATOR AUNA The deal strengthens the commitment of the three core partners to AUNA'S development, as well as to sustaining shareholder stability in the Spanish telecommunications group Madrid, December 18, 2001 - Grupo Santander Central Hispano, Endesa and Union Fenosa have agreed, in conjunction with ING Bank, to acquire the 26.89% stake in AUNA held by Telecom Italia for a total of 2 billion euros. The operation reinforces the commitment of the three core investors to the project and to maintaining a stable and controlling shareholding in AUNA. The transaction involves Santander Central Hispano taking an additional 12.62% in the company which, added to the 10.87% it already holds, gives it a total 23.49%. Endesa acquires an additional 2%, giving it 29.88%, and has an option to acquire up to a further 5.5%, while Union Fenosa acquires 2% for a total stake of 18.7%, and an option for another 4.77%. ING will take 10.27%. With the objective of strengthening the management structure, the three partners agreed to propose Joan David Grima, general manager of Santander Central Hispano and responsible for its industrial group, as deputy chairman and managing director of AUNA. He retains membership of the Bank's management committee. The three core shareholders view AUNA'S potential for further upside valuation as particularly significant, both in the light of performance in 2001 and also of revenue and income growth projected for the next two years. They consider that the shareholder stability achieved with the acquisition of Telecom Italia's stake, and the substantial increase in Grupo Santander Central Hispano's shareholding, will ensure the project's success. The decision reflects their unanimous belief in the future of Spain's number two telecommunications operator, with major market shares in each of its businesses - mobile phones, fixed phones, cable and Internet, and their strong commitment to the project. In this regard, they have agreed that AUNA strategy and corporate governance should be decided by consensus and in conjunction with the other shareholders. The partners have also established rules aimed at guaranteeing that any partial or full sale of their shareholdings to a third party should be effected jointly. The operation is subject to the relevant administrative authorizations.
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