Euskaltel S A : INSIDE INFORMATION Kaixo Telecom, S.A.U. announces the launch of a take over bid for the 100% of the share capital of Euskaltel, S.A. at a price of 11,17 euros per share.

PRIOR ANNOUNCEMENT OF THE VOLUNTARY TAKEOVER BID BY KAIXO TELECOM, S.A.U. FOR ALL THE SHARES COMPRISING THE SHARE CAPITAL OF EUSKALTEL, S.A.

This announcement is made public by virtue of the terms of Royal Decree 1066/2007, of 27 July, on the regulation of takeover bids for securities ("Royal Decree 1066/2007") and contains the main characteristics of the takeover bid which is subject to the mandatory authorisation of the Spanish National Securities Commission (the "CNMV").

The detailed terms and characteristics of the takeover bid will be set out in the prospectus (the "Prospectus") to be published when the above-mentioned authorisation is obtained.

In accordance with the terms of article 30.6 of Royal Decree 1362/2007, of 19 October, as of the date of this announcement, those shareholders of Euskaltel, S.A. who acquire shares that attribute voting rights will have to notify the CNMV of that acquisition when the proportion of voting rights in their possession reaches or exceeds 1%. Moreover, the shareholders of Euskaltel, S.A. who already held 3% of the voting rights will notify any transaction that implies a subsequent variation of that percentage.

Pursuant to the terms of section 2.b) of the Fifth Rule of CNMV Circular 1/2017, of 26 April, as of the date of this announcement, any operations under the Euskaltel, S.A. liquidity agreement must be suspended, in the event there are any.

1. IDENTIFICATION OF THE BIDDER

The bidder is Kaixo Telecom, S.A.U., a Spanish public limited company (sociedad anónima), with registered office at Parque Empresarial Zuatzu, Edificio Easo, 2ª planta, número 8, 20018 San Sebastian (Guipúzcoa), registered with the Commercial Registry of Guipúzcoa in volume 2,992, page 114, sheet SS-43553 and with tax identification number A-04982526 (the "Bidder"). The Bidder's shares are not listed on any securities market, and its LEI code is being processed.

The Bidder is a company that is wholly owned by Masmovil Ibercom, S.A.U., a Spanish public limited company (sociedad anónima), with registered office at Parque Empresarial Zuatzu - Edif. Easo, S/N, San Sebastián (Guipúzcoa), registered with the Commercial Registry of Guipúzcoa in volume 2,172, page 182, sheet SS-13.511 and with tax identification number A-20609459 ("MASMOVIL").

MASMOVIL is, in turn, 100% owned by Lorca Telecom Bidco, S.A.U., a Spanish public limited company (sociedad anónima), with registered office at Avenida de Bruselas 38, Alcobendas 28108, Madrid, registered with the Commercial Registry of Madrid, in volume 40,200, page 56, sheet M-714328 and with tax identification number A-88585906 ("BidCo").

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Meanwhile, BidCo is owned by Lorca Holdco Limited ("MidCo"), a company incorporated according to the laws of England and Wales, with registered office at 1 Bartholomew Lane, London, EC2N 2AX, United Kingdom, recorded at Companies House for England and Wales under number 12498656, which is, in turn, wholly owned by Lorca JVCo Limited ("JVCo"), a company incorporated according to the laws of England and Wales, with registered office at 1 Bartholomew Lane, London, EC2N 2AX, United Kingdom, recorded at Companies House for England and Wales under number 12497729.

JVCo is, in turn, 86.078% owned by Lorca Aggregator Limited ("TopCo"), a company incorporated according to the laws of Jersey, with registered office at 2nd Floor, Sir Walter Raleigh House, 48 50 Esplanade, St Helier, JE2 3QB, Jersey, recorded at Companies House for Jersey under number 131173.

The members of TopCo are, indirectly:

1. funds and vehicles managed by Cinven Capital Management (VII) Limited Partnership Incorporated, acting through its managing general partner Cinven Capital Management (VII) General Partner Limited, which currently hold an indirect stake of approximately 29.87% in TopCo;
2. funds, vehicles and segregated accounts managed by KKR Associates Europe V SCSp, acting through its general partner KKR Europe V S.à r.l. that currently own approximately 33.33% of TopCo; and
3. funds and vehicles managed by Providence Equity GP VII-A LP, acting through its general partner PEP VII-A International Ltd.; and funds and vehicles managed by Providence Equity GP VIII L.P., acting through its general partner, PEP VIII International Ltd. that currently hold an indirect stake of approximately 36.79% in TopCo,

(together, the "Investors").

The Investors do not, individually or in concert, have control over TopCo.

The Prospectus will contain a more comprehensive description of the shareholding and control structure of the Bidder.

2. DECISION TO LAUNCH THE TAKEOVER BID

The decision to launch the voluntary takeover bid for shares (the "Takeover Bid") was approved by the Bidder by virtue of the decisions adopted by its sole shareholder and by its management body on 26 March 2021, as well as by the board of directors of MASMOVIL on the same date.

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1. FILING OF THE TAKEOVER BID
   The Bidder will submit the application for authorisation of the Takeover Bid to the CNMV, together with the Prospectus and the other supplementary documents, in the terms envisaged in article 17 of Royal Decree 1066/2007. The Bidder envisages that the presentation of the application for authorisation will take place within the first two weeks of the one-month term following the date of this announcement.
2. TYPE OF TAKEOVER BID
   The Takeover Bid is voluntary, in accordance with the terms of article 137 of the restated text of the Securities Market Act, approved by Royal Legislative Decree 4/2015, of 23 October, (the "Securities Market Act") and article 13 of Royal Decree 1066/2007.
3. PARTICIPATION OF THE BIDDER IN THE TARGET COMPANY
   As at the date of this announcement, neither the Bidder, MASMOVIL, BidCo, MidCo, JVCo nor TopCo nor indeed, according to the best of the Bidder's knowledge, the directors of any of the same, are the direct or indirect holders of shares in Euskaltel, S.A. (the "Target Company" or "Euskaltel") or of securities that could grant the right to subscribe or acquire such shares.
   According to the calculation rules contained in article 5 of Royal Decree 1066/2007, TopCo does not hold any stake in the Target Company.
   In the 12 months prior to the date of this announcement, to the best of the Bidder's knowledge, after having carried out the reasonably expected checks, neither the Bidder, nor MASMOVIL, nor BidCo, nor MidCo, nor JVCo, nor TopCo, nor any person belonging to the group of either of them or potentially deemed to act in concert with any of them for the purposes of Royal Decree 1066/2007, nor the members of their respective management bodies, have carried out, or agreed to carry out, directly or indirectly, individually or in concert with others or in any other way, any transaction in relation to the shares issued by the Target Company, or instruments that give the right to acquire or subscribe shares in the Target Company, or that directly or indirectly grant voting rights in the Target Company.
   As at the date of this announcement, the Bidder has not appointed any members of the board of directors or the management of the Target Company.
   On 27 March 2021, Zegona Communications plc, Kutxabank, S.A. and Alba Europe, SARL, all shareholders, directly or indirectly, of the Target Company (jointly, the "Vendor Shareholders") have irrevocably undertaken vis-à-vis the Bidder to accept the Takeover Bid in relation to a total of 93,466,717 shares of the Company, together representing 52.32% of its share capital on this date (the "Vendor Shares"), all

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according to the terms of the irrevocable acceptance undertakings of the Takeover Bid described in section 13. These agreements do not constitute concerted action in accordance with the terms of article 5 of Royal Decree 1066/2007.

Finally, it is stated that no other member of the management, administrative or supervisory bodies of the companies that comprise the shareholding and ownership structure of the Bidder is simultaneously a member of the management, administrative and supervisory bodies of the Target Company.

1. TARGET COMPANY
   The Target Company is Euskaltel, S.A., a Spanish public limited company (sociedad anónima), with registered office at Parque Tecnológico, Edificio 809, 48160, in Derio (Vizcaya), tax identification number A- 48766695, and registered with the Commercial Registry of Vizcaya in volume 3.271, page 212, sheet BI-14727.
   At present, the share capital of Euskaltel is 535,936,080 euros, divided into 178,645,360 shares (including 173,596 shares kept in treasury stock at the date of this announcement, according to public information available), each with a face value of 3 euros, belonging to the same single class and series, with equal political and economic rights, which are fully subscribed and paid up and represented by book entries accounted for by the Securities Registration, Clearing and Settlement Service (Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A.) and its authorised member entities.
   According to public information available, Euskaltel has not issued pre-emption rights, bonds convertible into or exchangeable for shares, or warrants, or any additional similar instrument that could give rise, either directly or indirectly, to an entitlement to acquire or subscribe shares in Euskaltel.
2. SECURITIES AT WHICH THE TAKEOVER BID IS DIRECTED
   The Takeover Bid is launched for the entire share capital of Euskaltel, represented by 178,645,360 shares, each with a face value of 3 euros, belonging to the same single class and series, and to all the shareholders of the Target Company who are holders of shares of the Target Company.
3. MARKETS AT WHICH THE TAKEOVER BID IS DIRECTED
   The Takeover Bid is launched exclusively on the Spanish market, the only market on which the shares of the Target Company are listed.
   This announcement and its content do not represent the launch or dissemination of the Takeover Bid in jurisdictions or territories other than Spain. Consequently, this announcement and the Prospectus, which will be published after the authorisation of

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the Takeover Bid by the CNMV, will not be published or distributed in, or sent to, a jurisdiction or territory where publication thereof may be prohibited or restricted by law or where the registration or filing of additional documentation may be required, and the persons who receive this announcement or the Prospectus will not publish or distribute them in such jurisdictions or territories.

In particular, this announcement will not be published or distributed, and the Takeover Bid will not be launched, directly or indirectly, in the United States of America, or by using the postal system or any other international or interstate commercial means or instruments, or via United States of America securities markets mechanisms, or in any other form or means that may be sent to or distributed in, the United States of America. This announcement is not an offer to purchase and does not constitute an offer to purchase or an invitation or offer for the sale of shares in the United States of America.

9. CONSIDERATION

The Takeover Bid takes the form of a sale and purchase of shares in the Target Company. Specifically, the consideration offered by the Bidder to the owners of the Target Company's shares is 11.17 euros in cash for each share (the "Takeover Bid Price"). Consequently, the maximum total amount to be disbursed by the Bidder is 1,995,468,671.20 euros.

The Bidder has the resources necessary, including bank debt already secured at the date of this announcement, to cover the total consideration for the Takeover Bid. The consideration will be paid entirely in cash. The fulfilment of the obligation to pay the Takeover Bid Price will be secured by one or more bank guarantees in accordance with the terms of article 15 of Royal Decree 1066/2007.

If the Target Company carries out a distribution of dividends, reserves or any other distribution to its shareholders prior to the settlement of the Takeover Bid, be it ordinary, extraordinary, interim or supplementary (including those corresponding to the shareholder remuneration policy released by Euskaltel) the Takeover Bid Price will be reduced by an amount equivalent to the gross amount per share of the distribution provided that the publication date of the outcome of the Takeover Bid in the listing bulletins is on or after the ex-dividend date.

The Bidder believes that the Takeover Bid Price meets the requirements to qualify as an "equitable price" in accordance with the terms of article 137.2 of the Securities Market Act, insofar as it will be justified by means of a valuation report prepared by an independent expert, according to the valuation criteria established in that article.

In addition, the Bidder considers that the consideration offered meets the requirements of an "equitable price" according to the rules of article 9 of Royal Decree 1066/2007, insofar as (i) it is the highest price paid or agreed to be paid by the Bidder for the

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