The script of Saudi Telecom has not changed in the last few hours: the Arab group maintains the message that it hopes to obtain the authorization of the Central Government to obtain 9.9% of the capital of Telefónica. The position is the same after the meeting of its first executives with the president of the Spanish group, José María Álvarez-Pallete, and its CEO, Ángel Vilá, and after the announcement by the Spanish Government that it will guarantee “the strategic interests of Spain”.
“We are optimistic about obtaining the aforementioned approval” is the official statement from the Saudi group, which, aside from obtaining or not obtaining a permit, is already guaranteed a shareholding weight similar to that of the first shareholders, which are BBVA, CaixaBank and BlackRock.
Saudi Telecom has directly bought 4.9% of Telefónica and, through derivatives, another 5%, which is the part that is pending the approval of the Council of Ministers. This additional percentage can be key for the investor to be able to exercise voting rights up to 9.9% and enter the board of directors, even though its interpretation does not match what the law says.
The Saudi investor maintains that, once the approval of the central government has been obtained, “he will obtain the voting rights corresponding to 5%”. Regarding joining the board of directors, he takes it for granted that there would be no impediment, but that “it is too early to talk about these issues”.
However, the Royal Decree 571/2023 approved in July by the Government obliges the investor in a defense-sensitive company such as Telefónica that wants to reach 9.9% not only to ask for permission, but also to accompany it of “a document in which he faithfully undertakes in a public deed not to use, exercise or cede voting rights to third parties, nor to form part of any administrative bodies of the listed company”. This wording limits its political power.
From the Government yesterday emerged the thesis that Saudi Telecom’s entry 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 major international investors on Spain”.
This position had only been defended until then by the unions UGT and CC.OO., for whom the arrival of Saudi Telecom will give “body and strength” to Telefónica.
Telefónica’s calculated silence also contributed yesterday to the Spanish company’s shares rising on the stock market by more than 2%. 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.
President Pedro Sánchez, who will attend the G-20 summit in New Delhi this weekend, has no scheduled meeting to discuss the operation with the representatives of Saudi Arabia, presumably led by the crown prince, Muhammad bin Salman.
Yesterday also grew the list of actors who admit not having been informed in time of the Saudi investor’s intentions. The Government and Telefónica were joined by the major shareholders of the Spanish telco and the Royal House, reports Mariángel Alcázar. The president of the PP, Alberto Núñez Feijóo, reproached the Central Government for the lack of knowledge of the operation: “They don’t find out what happens in strategic companies”, he said.
Saudi Telecom continues to not register its stake in the CNMV, but sources from the supervisor say it has four days to register it. The Government, for its part, will have three months to pronounce on the purchase from the moment the investor communicates it.
The Spanish manager José del Valle, who is part of the Saudi Telecom management committee and who was CEO of a subsidiary of Telefónica, celebrated yesterday on LinkedIn the “partnership” between the two companies.
