Telefónica, a major Spanish operator group, has recently proposed the acquisition of remaining shares in Telefónica Deutschland. This deal constitutes the remaining 28.19% stake in Telefónica Deutschland, bundled with a fair premium of nearly 37% on the pre-existing share prices. Already an enticing proposition, this shows Telefónica’s confidence and commitment it has towards this move.
The larger the gamble, the higher the stakes, and this purchase proposal lies no exception. The premium on the share price extends an olive branch to existing stakeholders, indicating that this might be their best shot at a fruitful return. But for it to be a successful move, stakeholders need to be accurately convinced that the company’s growth doesn’t surpass the offered price in the upcoming years. With this in play, Telefónica signals its expectation of future hindrance in the path of the company’s organic growth.
On releasing an accompanying press statement, Telefónica states, “The Offer reinforces Telefónica’s strategy to focus on its core geographies (Spain, Brazil, Germany and the UK) and its strong commitment to the German market, representing one of the most attractive and stable telecom markets in Europe.” This move is aimed at simplifying the group’s structure while solidifying its foothold in the promising European market.
Future plans of this giant telecom player would be much clearer as it is predicted to unfold its strategic vision for the next few years, within the week. An earlier hint during its Q2 earnings announcement went on to state, “Focused on the customer and the creation of shareholder value, and with technology as a decisive factor to better understand and connect with the world, Telefónica is preparing its 2023-2026 plan with a model of operational excellence based on three pillars: growth, profitability and sustainability.” These words resonated from the CEO, José María Álvarez-Pallete.
Further to this, we also see an interesting development as Telefónica, concurrently trying to take complete ownership of its subsidiary while Saudi operator group, STC, aims for a 10% stake in the whole group. This unexpected move has sparked alarm within the Spanish state that is considering to buy a considerable stake of its own to ensure Spanish ownership of the deemed ‘strategic company’. A testament to the rising political interest in the ownership of telecom companies who are increasingly becoming the hot topic of venture capitals.