Zegona Communications PLC intends to increase its stake in Spanish regional cable operator Euskaltel SA by up to a maximum of 12.5% through market purchases.

The British company, which currently owns approximately 15.0% of Euskaltel, will no longer proceed with its earlier proposal of acquiring Euskaltel shares at a price of €7.75 per share. Zegona instead proposed placing a minimum of 95,238,096 new ordinary shares in the capital of the company to raise equity proceeds of at least £100 million, according to a Jan. 14 news release.

The placing of the shares requires approval by Zegona shareholders.

Zegona also entered into a shareholder agreement with Talomon Capital Ltd., which holds a stake in both Zegona and Euskaltel. Under the agreement, Talomon will have an ownership entitlement of up to 2.4% in Euskaltel.