Spain buys the 10% of Telefònica, after 24 years of privatization

The Spanish state will buy up to 10 percent of Telefónica’s share capital to “safeguard its strategic capabilities.” SEPI, the treasury holding company that controls Madrid’s state holdings, sent a notice to the National Securities Market Commission (CNMV) with this information. A move that comes in the midst of the process of the entry of the Saudi STC as well and that has raised so many doubts in the government of Pedro Sánchez is that SEPI, under the control of the Ministry of Finance, will become the first shareholder. The state had exited the telecommunications company a full 24 years ago. Privatization

At the current share price, the state would have to shell out more than 2 billion euros to become a shareholder with the 10 percent it wants. Telefónica, at market close, had a price per share of 3.56 euros.

It acknowledges contacts with the bank in recent months to explore new ways to obtain resources and does not rule out issuing government bonds to cover the investment. It almost sounds like Italy.

“It is hereby informed that the Council of Ministers at today’s meeting resolved to order the State Company of Industrial Participations (“SEPI”) to carry out the acquisition of up to 10 percent of the share capital of the company Telefónica, SA (Telefónica),” according to the document sent by the stock market regulator. “With a vocation for permanence, SEPI’s participation will enable Telefónica to provide greater stability for its shareholders so that the company achieves its objectives and, thus, helps safeguard its strategic capabilities. SEPI will proceed to carry out the procedures and actions that will allow the start of the process to be completed, minimizing the impact on price and the acquisition of the necessary volume of shares,” the public entity added.

The transaction was communicated to Cnmv but was not discussed at the press conference after the Council of Ministers. The Ministry of Finance sent a statement highlighting the “extensive deployment of telecommunications infrastructure that guarantees connectivity and digital services to Spanish citizens and businesses” available to Telefónica, emphasizing the company’s presence in the defense sector.

The Spanish state thus enters not only an important company in Spain but also a telecommunications group that is spread throughout Latin America with Movistar.

This decision continues the line already underway in other European countries, such as France, where the state has bought back 100 percent of EDF, the national energy company, so that it can guide national energy policy and, more importantly, set energy prices.