The offer of 3.25 euros per share represents a 13% premium to Tele Columbus' closing share price on Friday.
Top shareholder United Internet AG on Monday said it will offer its 29% stake in exchange for a stake in the Morgan Stanley-backed investment vehicle.
Tele Columbus said the deal is likely to help finance a 2 billion euro expansion of its fibre optic telecommunications network. It said the deal is also likely to benefit United Internet group companies including 1&1 Drillisch AG, which over the weekend signed a deal to use Tele Columbus' network to market its own broadband products.
Tele Columbus also said 13% stakeholder Rocket Internet SE supports the deal.
Morgan Stanley Infrastructure Partners said the investment vehicle, dubbed Kublai GmbH, will fully subscribe to a rights issue worth 475 million euros at a price yet to be set.
It will also inject up to 75 million euros in further equity after the transaction closes, the Morgan Stanley unit said.
($1 = 0.8199 euros)
(Reporting by Thomas Escritt; Editing by Christopher Cushing)