British Company In Talks For Stake In Vodaphone Spain

A statement issued today hints that a significant shift is on the horizon for Vodafone Spain. Zegona, a UK-based investment firm, is in advanced discussions to acquire a substantial stake in Vodafone’s Spanish operations.

On Friday, September 22, Zegona officially confirmed ongoing negotiations with Vodafone for a potential acquisition of either a part or the entirety of the telecom giant’s business in Spain. The London Stock Exchange received a statement highlighting the possibility surrounding the €5 billion deal, writes ABC.

Market Movements

‘There are talks with Vodafone to acquire the operator’s business, but there is no certainty,’ Zegona announced. The Financial Conduct Authority (FCA) has, upon Zegona’s request, halted its listing on the London Stock Exchange.

This development follows recent industry shifts, including Saudi Arabia’s STC acquiring a 9.9 per cent stake in Telefonica for €2.1 billion. Additionally, Mario Vaz from Portugal is tipped to succeed Antonio Coimbra as Vodafone Spain’s chairman on October 1.

Zegona is actively engaging with several banks to secure financing for this potential transaction. The deal’s conclusion is dependent on finalising terms with Vodafone and completing due diligence of the Spanish subsidiary. Acquiring 50 per cent of Vodafone Spain could streamline the transaction process.

Valuation And Competition

The estimated value of Vodafone’s Spanish business exceeds €5 billion, as reported by ‘Expansion’. Other investment firms, including Apollo, Apax, Iliad, and Liberty, are also considered potential contenders for acquiring the subsidiary.

Zegona is no stranger to the Spanish telecom sector, having previously acquired and sold Asturian telecommunications operator Telecable. Zegona subsequently held a significant stake in Euskaltel. In March 2021, Euskaltel faced a takeover bid from MasMovil, valued at €3.5 billion, marking a 26 per cent premium.

Vodafone’s Strategic Review

Vodafone Group’s CEO, Margherita Della Valle, disclosed a strategic review of the Spanish business last May. ‘We will be a leaner and simpler organisation, to increase our commercial agility and free up resources,’ she stated. The focus will be on optimising products and geographies for sustained growth and profitability.

Vodafone Spain reported a turnover of €3.907 billion in the last fiscal year, a 6.5 per cent decrease from €4.180 billion the previous year.

According to the London Stock Exchange: ‘Zegona is a British company investing strategically across Europe with the objective of acquiring businesses in the European TMT sector, using a ‘Buy-Fix-Sell’ strategy to deliver attractive shareholder returns.