Pallete welcomes the full merger of the Saudi STC into Telefónica: “It is a good investor”
The government has unblocked the total disembarkation of Saudi Arabia in the stake Telephone and allowed her to increase her participation to 9.97% of the company’s capital. The Council of Ministers has given the green light to Saudi Telecom (STC), controlled by the Saudi Arabian state, to expand its participation and assert its position. in one of the largest shareholders of a telecommunications company, linked to the Spanish state and criterianow with shares of 10% each.
STC announced more than a year ago its plan to take a nearly 10% stake in Telefónica.in a €2.1 billion operation. The phased plan includes the direct purchase of 4.9% and the acquisition through derivatives of a further 5%, which can now be implemented after receiving approval from the Spanish government under the so-called “anti-takeover shield”. the permit was approved on terms that the Saudi Arabian telecommunications company voluntarily accepted, and this may affect how and when the new partner joins Telefónica’s board of directors, as well as other corporate governance matters.
He Telefonica President Jose Maria Alvarez-Palleteconfirmed that it still does not know the conditions that the executive has imposed on its new major shareholder, but welcomes the complete departure of the Saudi partner. “He’s a good investor. We know him”– the top manager of the Spanish group emphasized in a conversation with a number of media outlets within the framework of the XXIII Congress of the Spanish Confederation of Directors and Executives (CEDE), which takes place this Thursday in La Coruña.
“We are waiting for details of the decision of the Council of Ministers. “UTK logically hasn’t told us anything new in this sense since last year, when it announced its participation in Telefonica,” noted the President of Telefonica. “In any case, one of Telefonica’s greatest strengths is its shareholders, large and small, who provide stability and support for the operator and reflect investor confidence in Telefonica’s strategy.”
“OK” with conditions
He Economy Minister Carlos Bodi confirmed, without going into detail, that permission to increase its participation includes special conditions for Southern Telecom. “Measures or conditions have been tabled and established, which have been accepted by the Saudi company, to effectively ensure that this operation is carried out in a manner that ensures this strategic element, namely the operational autonomy of Telefonica, which national interests must be protected, as I said, and that this critical infrastructure be protected,” he noted at a press conference after the meeting of the Council of Ministers.
The Spanish executive’s approval clears the way for Saudi Arabia to increase its direct stake in Telefónica to 9.97% and also allows STC to join the board of directors. groups. Once STC executes the derivatives it controls, STC’s new participation will give it the right to have a representative on the board of directors of the Spanish company. But one of the conditions agreed with the government may be that the STC must temporarily shelve its request for a seat on Telefonica’s governing body, as well as other conditions related to increased controls over information on matters of national interest. (especially in relation to contracts with the Armed Forces or other security-related organizations) and that this may be excluded from matters considered by the council.
more than a year ago
The surprise appearance of Saudi Arabia in the capital, announced on September 5, 2023, and its intention to become its largest shareholder triggered other movements that revolutionized the management of the telecommunications company and demonstrated the strategic nature of the group for Spain. . Despite the fact that during all this time the attack by Saudi Arabia ended, the reaction to the movement of the “petrostate” opened a new stage in the development of the company with a new strengthened core of Spanish shareholders.
And even before Saudi Arabia completes its plan, the government and Criteria, the investment arm of the La Caixa Foundation, have decided to mobilize to defend the autonomy and Spanishness of the telecommunications company. State-owned Industrial Participation Company (SEPI) and Criteria now control stakes of 10% each – linked to a virtual stake run by Saudi Telecom – after making purchases totaling almost €3.8 billion in recent months to protect the company, which is considered strategic for national interests due to its connection with defence, security and digitalization of the economy.