2023-10-30 15:59:43
Saudi Telecom (STC)the state-controlled operator of Saudi Arabia, has caused a stir with its surprising entry into the shareholding of Telephone. The company aspires to become the main shareholder of the Spanish telecom company, with a 9.9% stake, and to achieve this must have the explicit permission of the Spanish Government.
Almost two months have passed since STC announced its entry into the capital of Telefónica, the Saudi group the authorization request has not yet been formalized before the Government to complete control of the 9.9% shareholding package, he still does not reveal when he will do so and still does not confirm whether he will request to sit on the board of directors of the Spanish group. And while the wait lasts, the Government insists on highlighting the strategic nature of Telefónica for Spain and its intention to ensure the autonomy of the company and national interests at all times.
The Arab operator, 64% controlled by one of the Saudi sovereign funds, is moving to calm things down and confirm the friendly intentions of the operation. Saudi Telecom took advantage of the presentation of its quarterly results to promise “cooperation” with Telefónica and show its full “confidence in the growth and upside potential” of the group commanded by José María Álvarez-Pallete.
“Telefónica is one of the largest telecommunications companies in the world with a presence in main markets such as Spain, Germany, the United Kingdom and Brazil. This investment seeks strengthen cooperation between the two companies so that they benefit from all the opportunities available in the future,” said STC CEO Olayan Alwetaid.
Saudi Telecom highlights the operation as a “milestone in the group’s expansion and growth strategy” and that the transaction itself is a sign of confidence in the “sustainable growth and upside potential” of Telefónica. The Saudi company praises the Spanish telecom’s “unique portfolio of top-level infrastructure assets and next-generation platforms” as fundamental pieces to justify its interest in cooperation between both companies.
Government surveillance
Saudi Telecom has acquired a direct participation of 4.9% of the shares of the Spanish company and another 5% indirectly through financial derivatives, for a total of about 2.1 billion euros. The Saudi group can currently only exercise the voting rights corresponding to that direct 4.9% package.
The Arab operator must ask permission from the Ministry of Defense and have the subsequent ‘ok’ from the Council of Ministers if it intends to exercise political rights up to 9.9% or if it confirms its intention to have a presence on the board of directors of Telefónica. The Government cannot take any measure if the new investor does not make a move and activate the process to exceed the current level.
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“Telefónica is a strategic company for Spain due to its role in the field of telecommunications, but also in the field of defense,” the Government spokesperson and acting Minister of Territorial Policy stressed this Monday, Isabel Rodriguez, at the press conference after the Council of Ministers. “The Government is defending that strategic interest for our country, at the same time that we are attracting foreign investments to attract new technologies, innovation, growth and the creation and generation of quality employment that this type of companies entails in our country and their new investments.
The Government has avoided commenting on whether among the maneuvers it is studying to ensure the autonomy of the company and, ultimately, its Spanishness, there is the possibility of the public holding company of industrial holdings SEPI purchasing a share package in Telefónica, supported by Spanish businessmen, as reported by El Confidencial. The takeover of 5% by SEPI would create a stable core of Spanish shareholders, together with BBVA (4.87%) and Caixabank (3.5%, which adds another 1.5% in the hands of Criteria, the investment arm of Fundación Caixa).
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