2023-09-06 09:26:11
Investors were quick to react to the announcement, made public on Tuesday night with the market already closed, of the entry of Saudi Arabia, through the STC Group, into the capital of Telefónica. The operator, one of the values with the greatest weight in the Spanish Stock Market, reacts with increases of 2.5% to the operation against an Ibex that opened the session practically flat.
The company’s titles thus reach 3.85 euros, a rebound that extends its accumulated rise in the year to 14%, after a more complicated 2022 in which its shares lost 12% of their value.
It thus seems that investors and analysts have welcomed the purchase of almost 10% of the capital of the multinational, although it is an operation that would still need the approval of the Government. And it is that STC -with a market value of 49,200 million- is indirectly controlled by the Saudi kingdom through different funds and participations (64% in the hands of the Government). Not to mention that the 9.9% acquired for 2,100 million euros is the limit allowed by Spanish legislation against the entry of a non-EU investor into a national company.
After the operation, the Arab group becomes the largest shareholder of Telefónica, ahead of BBVA (4.87%), BlackRock (4.48%) and CaixaBank (3.5%).
For Elena Fernández-Trapiella, Bankinter analyst, the operation is positive for Telefónica for three reasons. The first, which reinforces its objective of “having a long-term stable shareholder base.” On the other hand, and according to the expert, shareholders should be calm when STC confirms the current management team “and particularly José María Álvarez-Pallete, so the management line should not change.”
Finally, according to the calculations that the firm manages based on the information available, the acquisition cost would have been 3.6887 euros per share, which “will represent an informal floor for the price from now on.”
Pending more details, the recommendation for the stock remains ‘buy’, with a target price of 4.20 euros per share, which still leaves considerable upside potential for Telefónica compared to current prices.
For now, the company has assured that it “takes note of STC’s friendly approach” to the group and “of its support for the management team, Telefónica’s strategy and its ability to create value”, according to company sources. In fact, its president, José María Álvarez-Pallete, would have found out about Saudi Arabia’s intention a few hours before the official announcement.
Where they also look closely at the implications of the purchase is within the acting government. The Saudi landing in a strategic company for Spain, such as Telefónica, implies that the Executive is going to analyze “the details of the operation” in case it requires “some type of authorization because it is an investment in a strategic operator,” state government sources. Although the truth is that the STC group has fine-tuned the purchase by acquiring just 9.9%, the legal maximum allowed so as not to have to deal with any additional administrative authorization.
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