Singapore’s GIC is reportedly planning to acquire a 25% stake in a fiber-optic broadband joint venture involving MasOrange and Vodafone Spain, which is now owned by Zegona Communications PLC (GB:ZEG). According to the Financial Times, which cited sources familiar with the deal, the investment is valued at around $1.6 billion and is expected to be officially announced soon.
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For context, Singapore-based GIC is a state-owned sovereign wealth fund managing the country’s foreign reserves through long-term global investments. Meanwhile, MasOrange is Spain’s largest mobile operator, created from a merger between Orange Spain (ORANY) and MásMóvil.
Details for the Deal
With this deal, Singapore’s GIC will expand its presence in Spain, one of Europe’s largest telecom markets. Additionally, the investment will help create one of the region’s biggest fiber broadband companies, following a joint venture announced by the two Spanish telecom providers in January.
As part of the agreement, MasOrange will own 58% of the new venture, while Vodafone Spain will hold a 17% stake. MasOrange plans to use its share of the proceeds to lower debt, while Vodafone Spain aims to reduce leverage and return cash to shareholders.
The deal also highlights the intensifying competition in Spain’s telecom market, with Vodafone Spain and MasOrange competing against industry leader Telefónica (TEF). To grow their market share, these companies have been actively signing agreements to expand their network reach.
What Is the Price Target for Zegona Communications?
According to TipRanks, ZEG stock has a Strong Buy rating based on five Buy recommendations. The Zegona stock price target is 1,062.0p, implying an upside of 22.07% from the current trading levels. The price target has a high forecast of 1,200p and a low forecast of 980p.
