Telefónica rises as state holding company unveils plan to take stake

Source: Telefónica

Telefónica’s shares jumped on Wednesday after a Spanish state holding company said it planned to buy a stake of up to 10% in the operator in response to moves by Saudi Arabia’s STC Group to acquire a similar stake.

The government holding company Sepi had earlier revealed on Tuesday that it was considering a potential acquisition of shares in the telco, which is seen as a strategic asset of national importance. The government itself has not commented on the move.

Telco STC is majority-owned by the Saudi sovereign wealth fund. The telco acquired a 4.9% stake in Telefónica, but requires approval by the Spanish government for a plan to increase to that to 9.9% by converting derivatives it has already acquired into shares.

The Saudi group told the Spanish government and Telefónica in September that it planned to take a 9.9% stake in the operator, making it the biggest investor in the Spanish telco.

Spanish deputy prime miinster Nadia Calviño noted at the time that the government’s approval would be needed and said that the country would keep its “strategic interests” in mind when taking a decision.

Stc’s €2.1 billion investment in the telco was described by the Saudi outfit as “another milestone in stc Group’s expansion and growth strategy”.