• Sat. May 25th, 2024

Spain Re-Enters Telefónica’s Shares: Understanding the Government’s Strategy and Implications

BySamantha Nguyen

Mar 25, 2024
SEPI initiates purchase of Telefónica and acquires 3% of teleco’s capital | Companies

The State of Spain has once again become a shareholder of Telefónica after 26 years of absence. This decision was made in response to the Saudi STC’s acquisition of 9.9% of the company’s capital. In turn, the government instructed the State Society of Industrial Participations (SEPI) to purchase an additional 10% of Telefónica’s capital, bringing its stake to 13%. The SEPI already held 3% of Telefónica’s capital and is required to disclose its ownership once it exceeds that threshold. The recent purchase represents an investment of about 700 million euros towards reaching 10% ownership.

The State’s interest in Telefónica is part of its strategy announced last year to acquire a 10% stake in the company. Despite ongoing purchases over several days, the announcement was made only recently. Additionally, CaixaBank, a major shareholder, reduced its stake in Telefónica from 3.510% to 2.510% through the sale of financial coverage. This decision was made independently of the State’s acquisitions.

SEPI clarified that its purchases were initiated to comply with the government’s directive to acquire up to 10% of Telefónica’s shares. Meanwhile, Criteria, the investment arm of La Caixa Banking Foundation, has continued to increase its position in Telefónica through recent acquisitions. While these developments unfold, the Saudi STC’s intentions following its acquisition of shares remain uncertain.

Despite months of silence from the Saudi telecom company, discussions have taken place regarding its proposed entry into the company’s board of directors. Telefónica remains focused on delivering value to its shareholders and customers amid these changes in ownership. As the State solidifies its position in Telefónica, the company remains dedicated to its long-term strategic goals amidst evolving shareholder dynamics.

In conclusion, Spain has re-entered as a shareholder in Telefónica after a long absence, with an aim to acquire a significant stake in the company. This move comes after Saudi Arabia purchased a large portion of shares and led telecom giant Deutsche Telekom outright earlier this year.

The government instructed state-owned industrial participation society SEPI to purchase an additional 10% stake in Telefónica’s capital following Saudi Arabia’s acquisition announcement last week.

Telefonica’s CEO José María Álvarez Palopo expressed confidence in his team’s ability to continue growing despite new ownership changes.

Saudi Arabia had bought just over $8 billion worth

By Samantha Nguyen

As a content writer at newsqwe.com, I am passionate about crafting engaging and informative articles that captivate our audience. With a background in journalism and a keen eye for detail, I strive to deliver content that is not only well-researched but also adds value to our readers' lives. From breaking news stories to in-depth features, I take pride in my ability to tell compelling stories that resonate with our diverse audience. When I'm not typing away at my keyboard, you can find me exploring new cafes, practicing yoga, or getting lost in a good book. I am thrilled to be a part of the newsqwe.com team and look forward to sharing my love for writing with all of our readers.

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