The British fund Zegona is negotiating with Vodafone to purchase its business in Spain, for which it is simultaneously seeking the necessary financing together with several banking entities, it announced this Friday in a statement.
The operation, which would allow it to take over one of the three large telecommunications operators in Spain, is pending an agreement on the final terms and the completion of the ‘due diligence’ process already commissioned to know the situation of the company.
The British fund specializes in telecommunications and has Eamonn O’Hare, from Virgin Media, as its founder and chief executive. It values ??the Spanish subsidiary of Vodafone at around 5,000 million euros, according to Expansión, which has advanced the news of its interest.
The firm is also an old acquaintance in the consolidation of telecoms in Spain, where it became the main shareholder of Euskaltel, later sold to MásMóvil, which in turn is in the process of integration with Orange.
The purchase of Vodafone Spain would only deepen this process of reorganizing the corporate map of telecommunications in Spain. A few days ago, Saudi Telecom announced the purchase of 9.9% of Telefónica, at a time when, according to analysts, large investors are taking positions in the face of a possible change of criteria in the European Commission that bets more on few and large continental champions than because of the strong competition in each country.
Zegona indicates in the note that, if it bought Vodafone Spain, it would carry out a reverse merger with which the acquired company would become a new one listed at least on the London Stock Exchange (LSE).
In May, Vodafone already sent the message that the sale of the business in Spain was one of the options on the table. The group had undertaken a “strategic review” that would include “structural changes” to the company, the benefits of which are below the cost of capital.
Precisely, the poor results of the subsidiary caused the departure of the CEO in Spain, Colman Deegan, replaced by Mário Vaz. A few days ago, Federico Colom, chosen to direct the company’s strategy, announced his departure for personal reasons.
Bloomberg has reported that Vodafone already received offers for the business in Spain before the summer for amounts exceeding 3.5 billion euros, including some from investment funds.
Vodafone’s revenues in Spain, which exceed 4 billion euros per year, have been falling since 2018 due in part to the continuous entry of new competitors into the market. Digi is now the one that has a strong foothold in the market, in which other companies such as Finetwork also appear.
