United Internet AG says it has resolved to make no further investment in Kublai GmbH, the company which holds around 95% of the shares in Tele Columbus AG.
It follows a dispute with fellow shareholder Morgan Stanley Infrastructure.
United Internet waived its right to increase its stake in Kublai to 40% after it was diluted to around 5% as a result of a capital increase during the first quarter of 2024.
The company, which also owns telecommunications provider 1&1, stood back from the investment. Hilbert Management GmbH, an infrastructure fund managed by Morgan Stanley Infrastructure, subscribed to the full amount of the capital increase totalling €300 million. As a result, United says it will lose around €185 million.
“United Internet is convinced that the valuation of Tele Columbus AG on which the capital increase is based is significantly too low and that the dilution of the shares held by United Internet is therefore too far-reaching.
“However, its majority of votes at the shareholders’ meeting enabled MSI to conduct the capital increase on the basis of a valuation determined by MSI. United Internet will now initiate the contractually stipulated anti-dilution proceedings and arrange for an arbitration court to review MSI’s valuation.
“If the court follows United Internet’s opinion based on a valuation commissioned prior to the capital increase, United Internet is entitled to a compensation amount of approximately EUR 300 million.”
Earlier this month, Tele Columbus began the disconnection of customers in flats and other forms of share accommodation where there is no contract. Around 40% of Tele Columbus’ three million subscribers could be affected following the introduction of new laws that give tenants the right to opt out of TV services provided by their landlords and previously bundled in with the rent.
