KKR and Cinven bid for MásMóvil could pave way for Spanish shake-up

Private equity groups KKR and Cinven have teamed up to make a friendly takeover bid for Spain’s fourth-ranked telecom operator MásMóvil for up to €2.963 billion, which could pave the way for a long-awaited shake up of the Spanish telecom market.  

The funds are offering €22.50 a share for the operator, which has been a major disruptor in the Spanish market for the last several years.

The private-equity outfits are bidding with the intention of keeping the publicly listed company’s current management, led by Meinrad Spenger, in place.

The bid values MásMóvil at a 20% premium on its closing price on Friday. The company’s major shareholders are the Ybarra Caneaga family vehicle Onchena, with 13%, a holdover from the operator’s acquisition of low-cost service provider Yoigo, Providence Equity, which holds 9.2%, the Dominguez family’s Global Portfolio Investment with 8.1% and Blackrock, with 5.4%.

The private equity outfits said they had secured acceptances from shareholders representing 29.56% of the company’s capital and need 75% to succeed in delisting it.

Spenger welcomed the move as “beneficial for the shareholders and other stakeholders in the company”.

According to analysts at Jefferies, a successful delisting could enable MásMóvil to take on more debt and cut costs in order to effectively target an expected migration of Spanish consumers to the low-cost segment of the market in the wake of the coronavirus lockdown and the accompanying economic downturn.

“Running [MásMóvil] outside the public glare could permit management to drive growth harder and maximise negotiating power into any future consolidation endgame,” the analysts said.

There was speculation last year that MásMóvil could be in the frame for a bid to take over Vodafone España, which was denied by both parties.

According to Jefferies, eventual consolidation among smaller players including MásMóvil could benefit Orange and Vodafone by limiting competition in the low-cost segment, but would offer limited relief to market leader Telefónica, whose large triple-play base would remain vulnerable to low-cost single and dual-play services.