LONDON, (Reuters) – German telecom group freenet AG (FNTG.DE: Quote, Profile, Research) is financing its 1.63 billion euro purchase of rival Debitel from private equity owner Permira [PERM.UL] with a syndicated loan, a banker close to the deal said on Wednesday.
The loan is being arranged by six banks – Deutsche Bank, JP Morgan, Lehman, Royal Bank of Scotland, UBS and UniCredit. Proceeds will finance the acquisition and will also refinance Debitel debt, the banker said.
The senior loan will total more than one billion euros and will carry a conservative deal structure with lower leverage and more covenants than Debitel's existing loan of mid 2007.
The deal is not expected to be launched to a wider syndication before June as the transaction is subject to anti-trust approval by the German cartel office.
Freenet Chief Executive Eckhard Spoerr said earlier this week he expects to get a green light from the cartel office within four weeks.
Freenet was formed from the merger of mobile phone company mobilcom and its internet arm in March 2007. Arma Partners LLP and Deutsche Bank advised freenet on the deal and UBS advised Debitel. (Reporting by Zaida Espana; Editing by David Cowell)