2023-09-06 19:08:07
The arrival of the Saudi operator STC to the shareholders of Telefónica after acquiring 9.9% of its share capital has been a master move that neither the current management team of the company nor even the Government itself expected in one of the strategic companies of the economy. The movement has come after a continuous devaluation of the multinational’s price on the stock market that has led it to stand at 3.75 euros per title before the Saudi company made the announcement.
With its landing, the axes of power in Telefónica change and only an exceptional performance by the Executive could change this movement if it considers that this key business in data, technology and even defense strategy is being put at risk.
The stock market crash
The telecommunications sector added years of weakness on the stock market, always in the wake of rumors of consolidation that finally did not materialize. The turmoil in the sector, and the improvement in results, has allowed Telefónica to recover 14% of its value on the stock market this year -counting the rise of 2.5% this Wednesday- after 2022 in which it lost more than one 12% Its titles are trading at 3.85 euros.
But that increase has not been enough to recover the 4.15 euros per share that came close to the highest for the year at the end of April. Since then, the firm has accumulated a decline of more than 7% on the Stock Market. A fall that accelerated this summer after losing the virtual mobile operator 1&1 as its first customer in Germany, after this company reached a new agreement with Vodafone, a rival of Telefónica in the German country.
The real problem for the operator is that instability has been a constant in its price in recent years, despite the intense debt reduction process undertaken by Álvarez-Pallete in recent years, and which worries shareholders so much. To get an idea of the weakness of its evolution – common to the entire sector in Europe – the current 3.85 euros are very far from the almost 10 euros that the value was close to when Pallete assumed the presidency. And also of the 6.2 euros that was around before the pandemic.
Javier Molina, senior market analyst for eToro, acknowledges that “with a capitalization of close to 22,000 million euros, acquiring 10%, as is the case of STC Group, seems highly efficient given Telefónica’s characteristics,” says the expert. . Especially considering that the 2,100 million euros that STC would pay in the operation compare with a market value of the group of more than 49,200 million. In other words, the disbursement has not required a huge effort for the Arab firm, taking into account the high participation that it will achieve in the Spanish operator
change of power
Until now, the main shareholders of Telefónica had been the banks. Specifically, BBVA and CaixaBank. In the first case, the entity chaired by Carlos Torres has almost 5% of the share capital (between direct and indirect participations), followed by Caixabank (with 3.5%); or the international investment fund BlackRock, with almost another 4.5%.
The investment arm of La Caixa, Criteria, has made a global investment in Telefónica that has exceeded 750 million euros since 2017. For now, the Saudi group considers it premature to request a seat on the board of directors. “We are still in the early stages of our investment and we trust the current management team of Telefónica, so it is too early to talk about these matters,” sources from the same point out.
The ace up Moncloa’s sleeve
There are two ways in which the Kingdom of Spain can intervene in a strategic company if it considers that part of the economy is being put at risk. Historically, it could make use of the ‘golden share’: a percentage of participation in the shareholding that, although it is not a majority, gives it the right of veto over key decisions. Enagás, Redeia, Airbus or Hispasat are some of the corporations in which the Government, through SEPI, maintains this indirect control.
In the case of Telefónica, the State already left its shareholding in 1999 after completing the privatization process of what historically was a public company from its inception. He could only prevent the movement of STC if he considers that he is invading strategic sectors with that operation. Therefore, it is analyzing its implications.
The latest ‘nationalization’ has derived from the pandemic. Since then, SEPI has come to the rescue of several companies in trouble such as Celsa (550 million loan), Air Europa (474 million), Técnicas Reunidas (340 million), Hotusa (241 million), Volotea (200 million), Duro Felguera (120 million), Tubos Reunidos (112.8 million), Air Nostrum (111 million), Wamos (85.2 million) or Hesperia (55 million).
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