Last December, the government decided to enter Telefonica to balance the acquisition of a stake in the company by Saudi Telecom Company (STC). State-run Sebi Holdings said on Monday that it had bought an initial three percent stake.
“This will be done in the quickest and shortest possible time, provided that this does not affect (Telefonica)’s share price,” Alegria said in a press conference after the weekly Cabinet meeting.
Telefonica shares rose about 1 percent in afternoon trading at 4.03 euros per share, outperforming the broader market in Madrid, which rose 0.37 percent. The stock has jumped 13 percent so far this year.
Alegria added that this would give the company greater stability for shareholders and protect its strategic capabilities, as Madrid Telefonica is a defense services provider.
The Saudi Telecom Company announced in September that it had acquired a 9.9 percent stake in Telefonica worth 2.1 billion euros ($2.28 billion), in a move to become its largest shareholder. Its stake consists of 4.9 percent of Telefonica shares and five percent through other financial instruments in the so-called economic exposure to the company.
After the government's decision to purchase a 10 percent stake, an informed source told Reuters that the purchase will be gradual and in small quantities over a period of up to two months and must be financed through the issuance of public debt.
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