Saudi Telecom’s script has not changed in the last few hours: the Arab group maintains the message that it trusts in obtaining authorization from the Government to reach 9.9% of Telefónica’s capital. The position is the same after the meeting of its first executives with the president of the Spanish group, José María Álvarez-Pallete, and his CEO, Ángel Vilá, and after the Government’s announcement that it will guarantee “the strategic interests of Spain ”.
“We are optimistic about obtaining said approval,” is the official statement from the Saudi group, which, regardless of whether or not a permit is obtained, already has guaranteed shareholding weight similar to that of the first shareholders, who are BBVA, CaixaBank and BlackRock.
Saudi Telecom has directly purchased 4.9% of Telefónica and, through derivatives, another 5%, which is the part that is pending approval from the Council of Ministers. This additional percentage may be key for the investor to be able to exercise voting rights up to 9.9% and enter the board of directors, although its interpretation does not coincide with what the law says.
The Saudi investor maintains that, once the Government’s approval is obtained, “he will obtain the voting rights corresponding to that 5%.” Regarding his entry into the board of directors, he assumes that there would be no impediment, but that “it is too early to talk about these matters.”
However, royal decree 571/2023 approved in July by the Government obliges the investor in a sensitive company for Defense such as Telefónica that wants to reach 9.9% not only to request permission, but also to accompany it with “a document in “anyone who reliably undertakes in a public deed not to use, exercise or assign his voting rights to third parties, nor to form part of any administrative bodies of the listed company.” This wording limits his political power.
From the Government yesterday the thesis emerged that the entry of Saudi Telecom into Telefónica may have “positive parts.” It was the expression used by the acting Minister of Social Security, José Luis Escrivá, who also described the degree of discretion of the buyers as usual and celebrated “the bets of large international investors on Spain.”
This position had only been defended until then by the UGT and CC.OO. unions, for whom the arrival of Saudi Telecom will give “body and strength” to Telefónica.
Telefónica’s calculated silence yesterday also contributed to the Spanish company’s shares rising more than 2% on the stock market. It is the first rebound since the acquisition of 9.9% of the first telecommunications operator for 2.1 billion euros was announced on Tuesday. The company has managed to exceed 22,000 million euros in capitalization.
Pedro Sánchez, who will finally not attend the G20 summit in New Delhi this weekend due to testing positive for covid, had not scheduled any meeting to discuss the operation with the representatives of Saudi Arabia, expectedly led by the crown prince, Mohamed bin Salman.
Yesterday also grew the list of actors who acknowledge not having been informed in advance about their intentions by the Saudi investor. The Government and Telefónica were joined by the large shareholders of the Spanish telecom company and the Royal House, reports Mariángel Alcázar. The president of the PP, Alberto Núñez Feijóo, blamed the Government for its lack of knowledge of the operation: “It does not know what happens in strategic companies,” he said.
Saudi Telecom has yet to register its stake with the CNMV, but sources from the supervisor specify that it has four days to do so. The Government, for its part, will have three months to decide on the purchase from the moment the investor notifies it.
The Spanish manager José del Valle, who is part of the management committee of Saudi Telecom and who was CEO of a subsidiary of Telefónica, celebrated yesterday on LinkedIn the “partnership” between both companies.
