Independent committee of Millicom (Tigo) board
believes anticipated takeover offer by Atlas at a price of US$24
per share would significantly undervalue Millicom in light of
expected financial performance
Luxembourg, June 27, 2024 – A
committee of independent members of the Board of Directors of
Millicom International Cellular S.A. (“Millicom”) confirms that it
has been in communication with one of Millicom’s shareholders,
Atlas Luxco S.à r.l and its affiliates (“Atlas”), regarding the
anticipated all-cash tender offer by Atlas for all outstanding
shares and SDRs in Millicom which Atlas does not currently own at a
price of US$24 per share (and the SEK equivalent per SDR).
Following deliberation, and after discussions
with Millicom’s financial advisors, the independent committee
unanimously believes and has informed Atlas that a $24 per share
offer price would significantly undervalue Millicom and not be in
the best interests of Millicom’s shareholders. The independent
committee’s belief takes into consideration, among other things,
Millicom management’s latest review of financial performance.
In light of the anticipated tender offer, and to
support Millicom’s shareholders in evaluating such tender offer,
based on Millicom’s preliminary review of financial performance for
the second quarter of 2024 (which continues to be subject to review
by Millicom’s management and auditor), the committee expects
that:
- Millicom’s Equity Free Cash Flow (EFCF)1 for full year 2024
will be above $600 million. This expectation reflects results
through mid-June and takes into account potential risks that may
impact performance. This expectation does not include $46 million
of net proceeds Millicom already received from its previously
announced Colombia tower sale.
- Millicom’s Leverage1 will end 2024 near the intermediate term
target of 2.5x.
The above expectation also excludes proceeds
that may be obtained from any future tower monetization. Millicom
has entered into exclusive negotiations regarding a sale and
leaseback of a large portion of its tower portfolio.2
The independent committee will carefully review
any information disclosed by Atlas in connection with its
anticipated tender offer and will issue the committee’s formal
recommendation to Millicom’s shareholders in accordance with the
Swedish Takeover Rules and other applicable requirements in case
such tender offer is made.
Advisors
The independent committee is receiving financial
advice from Goldman Sachs International and Morgan Stanley &
Co. International plc and legal advice from Davis Polk &
Wardwell LLP and Nord Advokater and Advokatfirman Lindahl.
-END-
For further information, please contact:
Press: |
Investors: |
Sofia Corral, Director Corporate Communications
press@millicom.com |
Michel Morin, VP Investor Relations investors@millicom.com |
Regulatory StatementCertain of this
information was, prior to this release, inside information and is
information that Millicom is obliged to make public pursuant to the
EU Market Abuse Regulation. This information was submitted for
publication, through the agency of the contact person set out
above, at 23:15 CET on June 27, 2024.
About MillicomMillicom (NASDAQ U.S.:
TIGO, Nasdaq Stockholm: TIGO_SDB) is a leading provider of fixed
and mobiletelecommunications services in Latin America. Through our
TIGO® and Tigo Business® brands, we provide a wide range of digital
services and products, including TIGO Money for mobile financial
services, TIGO Sports for local entertainment, TIGO ONEtv for pay
TV, high-speed data, voice, and business-to-business solutions such
as cloud and security. As of March 31, 2024, Millicom, including
its Honduras Joint Venture, employed approximately 15,500 people,
and provided mobile and fiber-cable services through its digital
highways to more than 45 million customers, with a fiber-cable
footprint over 14 million homes passed. Founded in 1990, Millicom
International Cellular S.A. is headquartered in Luxembourg.
1 EFCF and Leverage are non-IFRS metrics. Please refer
to Millicom’s 2023 Annual Report for a description of non-IFRS
measures.
2 At this stage, it is not possible to say that a
transaction is likely to materialize, nor to make any statement on
the terms, timing or form of any potential transaction.
Forward-Looking Statements
Statements included herein that are not
historical facts, including without limitation statements
concerning future strategy, plans, objectives, expectations and
intentions, projected financial results, liquidity, growth and
prospects, are forward-looking statements. Such forward-looking
statements involve a number of risks and uncertainties and are
subject to change at any time. In the event such risks or
uncertainties materialize, Millicom’s results could be materially
adversely affected. In particular, there is uncertainty about
global economic activity and inflation, the demand for Millicom's
products and services, and global supply chains. The risks and
uncertainties include, but are not limited to, the following:
global economic conditions, foreign exchange
rate fluctuations and high inflation, as well as local economic
conditions in the markets we serve, which can be impacted by
geopolitical developments outside of our principal geographic
markets, such as the armed conflict between Russia and the Ukraine
and related sanctions;
potential disruption due to diseases, pandemics,
political events, armed conflict, acts by terrorists, including the
impact of the COVID-19 virus and the ongoing efforts throughout the
world to contain it;
telecommunications usage levels, including
traffic, customer growth and the accelerated transition from
traditional to digital services;
- competitive forces, including pricing pressures, piracy, the
ability to connect to other operators’ networks and our ability to
retain market share in the face of competition from existing and
new market entrants as well as industry consolidation;
- the achievement of our operational goals, environmental, social
and governance targets, financial targets and strategic plans,
including the acceleration of cash flow growth, the expansion of
our fixed broadband network, the reintroduction of a share
repurchase program and the reduction in net leverage;
- legal or regulatory developments and changes, or changes in
governmental policy, including with respect to the availability and
terms and conditions of spectrum and licenses, the level of
tariffs, laws and regulations which require the provision of
services to customers without charging, tax matters, controls or
limits on the purchase of U.S. dollars, the terms of
interconnection, customer access and international settlement
arrangements;
- our ability to grow our mobile financial services business in
our Latin American markets;
- adverse legal or regulatory disputes or proceedings;
- the success of our business, operating and financing
initiatives and strategies, including partnerships and capital
expenditure plans;
- our expectations regarding the growth in fixed broadband
penetration rates and the return that our investment in broadband
networks will yield;
- the level and timing of the growth and profitability of new
initiatives, start-up costs associated with entering new markets,
the successful deployment of new systems and applications to
support new initiatives;
- our ability to create new organizational structures for the
Tigo Money and Towers businesses and manage them independently to
enhance their value;
- relationships with key suppliers and costs of handsets and
other equipment;
- disruptions in our supply chain due to economic and political
instability, the outbreak of war or other hostilities, public
health emergencies, natural disasters and general business
conditions;
- our ability to successfully pursue acquisitions, investments or
merger opportunities, integrate any acquired businesses in a timely
and cost-effective manner, divest or restructure assets and
businesses, and achieve the expected benefits of such
transactions;
- the availability, terms and use of capital, the impact of
regulatory and competitive developments on capital outlays, the
ability to achieve cost savings and realize productivity
improvements;
- technological development and evolving industry standards,
including challenges in meeting customer demand for new technology
and the cost of upgrading existing infrastructure;
- cybersecurity threats, a security breach or other significant
disruption of our IT systems or those of our business partners,
suppliers or customers;
- the capacity to upstream cash generated in operations through
dividends, royalties, management fees and repayment of shareholder
loans; and
- other factors or trends affecting our financial condition or
results of
operations.
A further list and description of risks,
uncertainties and other matters can be found in Millicom’s
Registration Statement on Form 20-F, including those risks outlined
in “Item 3. Key Information—D. Risk Factors,” and in Millicom’s
subsequent U.S. Securities and Exchange Commission filings, all of
which are available at www.sec.gov. All forward-looking statements
attributable to us or any person acting on our behalf are expressly
qualified in their entirety by this cautionary statement. Readers
are cautioned not to place undue reliance on these forward-looking
statements that speak only as of the date hereof. Except to the
extent otherwise required by applicable law, we do not undertake
any obligation to update or revise forward-looking statements,
whether as a result of new information, future events or
otherwise.
Non-IFRS Measures
This press release contains financial measures
not prepared in accordance with IFRS. These measures are referred
to as “non-IFRS” measures and include: non-IFRS service revenue,
non-IFRS EBITDA, and non-IFRS Capex, among others. The non-IFRS
financial measures are presented in this press release as
Millicom’s management believes they provide investors with an
additional information for the analysis of Millicom’s results of
operations, particularly in evaluating performance from one period
to another. Millicom’s management uses non-IFRS financial measures
to make operating decisions, as they facilitate additional internal
comparisons of Millicom’s performance to historical results and to
competitors' results, and provides them to investors as a
supplement to Millicom’s reported results to provide additional
insight into Millicom’s operating performance. Millicom’s
Remuneration Committee uses certain non-IFRS measures when
assessing the performance and compensation of employees, including
Millicom’s executive directors.
The non-IFRS financial measures used by Millicom
may be calculated differently from, and therefore may not be
comparable to, similarly titled measures used by other companies -
refer to the section “Non-IFRS Financial Measure Descriptions” for
additional information. In addition, these non-IFRS measures should
not be considered in isolation as a substitute for, or as superior
to, financial measures calculated in accordance with IFRS, and
Millicom’s financial results calculated in accordance with IFRS and
reconciliations to those financial statements should be carefully
evaluated.
Non-IFRS Financial Measure
Descriptions
Service revenue is revenue related to the
provision of ongoing services such as monthly subscription fees for
mobile and broadband, airtime and data usage fees, interconnection
fees, roaming fees, mobile finance service commissions and fees
from other telecommunications services such as data services, short
message services, installation fees and other value-added services
excluding telephone and equipment sales.
EBITDA is operating profit excluding impairment
losses, depreciation and amortization, and gains/losses on fixed
asset disposals.
EBITDA after Leases (EBITDAaL) represents EBITDA
after lease interest expense and depreciation charge.
EBITDA Margin represents EBITDA in relation to
Revenue.
Organic growth represents year-on-year growth
excluding the impact of changes in FX rates, perimeter, and
accounting. Changes in perimeter are the result of acquisitions and
divestitures. Results from divested assets are immediately removed
from both periods, whereas the results from acquired assets are
included in both periods at the beginning (January 1) of the first
full calendar year of ownership.
Net debt is Debt and financial liabilities,
including derivative instruments (assets and liabilities), less
cash and pledged and time deposits.
Leverage is the ratio of net debt over LTM (Last
twelve month) EBITDAaL, proforma for acquisitions made during the
last twelve months.
Capex is balance sheet capital expenditure
excluding spectrum and license costs and lease capitalizations.
Cash Capex represents the cash spent in relation
to capital expenditure, excluding spectrum and licenses costs.
Operating Cash Flow (OCF) is EBITDA less
Capex.
Operating Free Cash Flow (OFCF) is EBITDA,
less cash capex, less spectrum paid, working capital and other
non-cash items, and taxes paid.
Equity Free Cash Flow (EFCF) is OFCF less
finance charges paid (net), lease interest payments, lease
principal repayments, and advances for dividends to
non-controlling interests, plus cash repatriation from joint
ventures and associates.
Operating Profit After Tax displays the profit
generated from the operations of the company after statutory
taxes.
Return on Invested Capital (ROIC) is used to
assess the Group’s efficiency at allocating the capital under its
control to and is defined as Operating Profit After Tax divided by
the average invested Capital during the period.
Average Invested Capital is the capital invested
in the company operation throughout the year and is calculated with
the average of opening and closing balances of the total assets
minus current liabilities (excluding debt, joint ventures, accrued
interests, deferred and current tax, cash as well as investments
and non-controlling interests), less assets and liabilities held
for sale.
Average Revenue per User per Month (ARPU) for
our Mobile customers is (x) the total mobile and mobile financial
services revenue (excluding revenue earned from tower rentals, call
center, data and mobile virtual network operator, visitor roaming,
national third parties roaming and mobile telephone equipment sales
revenue) for the period, divided by (y) the average number of
mobile subscribers for the period, divided by (z) the number of
months in the period. We define ARPU for our Home customers as (x)
the total Home revenue (excluding equipment sales and TV
advertising) for the period, divided by (y) the average number of
customer relationships for the period, divided by (z) the number of
months in the period. ARPU is not subject to a standard industry
definition and our definition of ARPU may be different from other
industry participants.
Please refer to our 2023 Annual Report for a
list and description of non-IFRS measures.
Other Disclaimers
Morgan Stanley & Co. International plc
(“Morgan Stanley”) and Goldman Sachs International (“Goldman
Sachs”) are acting as financial advisors to Millicom and to no one
else. Morgan Stanley and Goldman Sachs are authorised by the
Prudential Regulation Authority (“PRA”) and regulated by the
Financial Conduct Authority and the PRA. In connection with such
matters, Morgan Stanley’s and Goldman Sachs’ and their respective
affiliates’ respective directors, officers, employees and agents
will not regard any other person as its client, nor will Morgan
Stanley or Goldman Sachs be responsible to anyone other than
Millicom for providing the protections afforded to their clients or
for providing advice in connection with the matters described in
this announcement or any matter referred to herein.
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