Telefonica's shares soar after Spanish government unveils plan to buy stake (updated)

Shenandoah Telecommunications

20/12/2023 08:50

(Adds detail, comments from economy minister, updates share
price)
       MADRID, Dec 20 (Reuters) - Telefonica's  TEF.MC  shares
soared on Wednesday morning after the Spanish government said on
Tuesday it would buy a stake of up to 10% in the company in a
counterbalance to a similar acquisition by Saudi Arabia's STC
 7010.SE .
    Telefonica shares were up 5.5% at 3.763 euros in early
trading, on track for their best day since Nov. 22, 2021 and the
top gainer in the STOXX 600 index  .STOXX .
    State holding company SEPI said on Tuesday it would buy the
shares in a way that would minimise the impact on market price
though it did not give a timeframe. A source close to the matter
told Reuters it would buy small quantities of shares over a
two-month period.
    A 10% stake had a market value of around 2 billion euros
($2.19 billion) as of Tuesday evening.
    The move is a response to the STC announcing it had built a
9.9% stake in Telefonica in September.
    As Telefonica is considered a defence service provider, the
Defence Ministry has a say in acquisitions and holdings between
5% and 10% unless the buyer commits to not requesting a seat on
the board.
    In October, SEPI said it was considering buying a stake in
Telefonica, which was seen as a government attempt to balance
the potential STC influence in the company.
    Economy Minister Nadia Calvino said on Tuesday SEPI's
presence in Telefonica -- it will become its largest shareholder
-- would "reinforce the company's ownership stability".
    The government said its acquisition in Telefonica would be
in line with the stakes which its large neighbours, such as
Germany, France and Italy, hold in their respective large
telecom companies.
    ($1 = 0.9118 euros)

 (Reporting by Jakub Olesiuk, Belen Carreno and Jesus Aguado;
editing by Inti Landauro and Jason Neely)
 ((jakub.olesiuk@thomsonreuters.com; +48 58 769 66 00;))