• Thu. May 30th, 2024

Government aims to quickly reach 10% stake in Telefónica, causing stock to surge to May highs

Byeditor

Mar 27, 2024

The Government spokesperson, Pilar Alegra, announced at a press conference on Tuesday that the Executive expects the State Society of Industrial Participations (Sepi) to acquire 10% of Telefónica in a short period. This statement came after Sepi notified that it currently holds 3% of the telecommunications operator’s shares. Alegra stated that the operation will be completed as quickly as possible, as long as it does not impact the share price.

However, Alegra’s statement had the opposite effect, causing Telefónica’s shares to rise for the first time since May 2023. By 4:30 p.m., the shares had reached 4.08 euros, representing a 2.26% increase. The rush to complete the operation could potentially increase the final cost by tens of millions of euros, as Sepi will need to disburse an additional 1,600 million euros to reach the 10% ownership stake.

The 3% ownership stake declared by Sepi is valued at over 700 million euros at market price. To reach the 10% ownership stake, an additional 1,600 million euros will need to be invested. Sepi is not required to disclose new purchases until it reaches a 5% stake in the capital. This development has significant financial implications for the government compared to the initial estimated cost of 2.1 billion euros.

In light of these developments, it is crucial for all stakeholders to closely monitor the situation and its potential impact on the telecommunications industry and the government’s budget.

By editor

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