The government shocked the stock markets this Tuesday when it surprisingly announced that the state, through the State Society of Industrial Participations (SEPI), would buy 10% of Telefónica's capital, which would make Telefónica the operator's main shareholder. The board justified the operation based on the strategic nature of the company in terms of security and defense. But he has also stressed the need to ensure the “stock stability” of the multinational. Both SEPI and the Ministry of Finance and Vice President and Minister of Economy Nadia Calviño have cited this stability to justify the operation. And the government wants to send a loud and clear message to its Saudi counterpart in response to the unannounced entry of the Spanish multinational Saudi Telecom Company (STC) into the capital. The operator of the sovereign wealth fund PIF launched on September 5 with the announcement of the purchase of 4.9% of the capital with the option of an additional 5% via convertible financial instruments for 2.1 billion.
Three and a half months later, the government's response came with the same formula as the Saudis: the announcement of the purchase of up to 10 shares at the close of the market and without the official knowledge of the operator's board % of Telefónica. Even the amount, as long as the collateral is not triggered, is similar to the amount paid by STC. This is a defensive move, but aimed at removing any doubt about the control of the main Spanish technology and telecommunications company. To this end, once this 10% is reached, the government will try to negotiate a stable pact with BBVA and La Caixa (and its foundation), Telefónica's two largest shareholders, to ensure this “share stability” in the long term. expected, as EL PAÍS has learned from sources familiar with the operation.
The aim is to prevent the Saudi entry into the council from unsettling the current forces. When the acquisition of 9.9% of the capital is completed, STC may claim one or two directors, but these would be immediately offset by those that SEPI would request for its 10% of the capital. Both CaixaBank-Criteria (6.03% of capital) and BBVA (4.87%) each have their own director (Isidro Fainé and José María Abril, respectively). To them we must add the two directors, in this case the President of Telefónica (José María Álvarez-Pallete) and the CEO (Ángel Vilá), as well as the external director Javier de Paz, linked to the PSOE. The rest, up to 15 members, are independent. Given a hypothetical takeover of STC on the board, even in a possible alliance with the Blackrock fund, which could request a seat on the board for its 4.48% of the capital, it would be deactivated by the new balance of power.
The alliance between BBVA and La Caixa at Telefónica is not new. Even before full privatization, they acted as a blockade in the so-called “hard core” of Telefónica under the last government of Felipe González. And they also share concerns with the company's two top executives about the way STC entered the capital. The appearance of the Saudis caught Pallete while traveling in San José (USA), and he had to rush back to Riyadh by private plane on the same day the news broke to ask the new investors for explanations. Operation.
Pedestrians in front of the historic Telefónica headquarters on Gran Vía in Madrid, early December. JAVIER SORIANO (AFP)
In the numerous meetings they have had with Telefónica's leadership since then, the Saudis have tried to calm the situation and ensure that this is an industrial investment and therefore made through STC and not directly from the fund. Sovereign, as in other financial or more speculative transactions, according to sources familiar with the discussions. They have also pledged their support to the company's management, with whom they maintain a strategic alliance, particularly in the security sector, sealed last February. However, these meetings have not helped to reveal the new partners' ultimate intentions and the role they want to play in the company's future. The example of Vodafone, where Etisalat, the telecommunications group from the United Arab Emirates, took 25% of the capital and blew up the board to influence strategic decisions such as the sale of the Spanish subsidiary to Zegona, caused fear in the offices in District C , at the Madrid headquarters of Telefónica and at the Moncloa Palace. “And Vodafone has no defense contracts with the British government,” emphasized an industry manager on Tuesday.
The government has preferred to wait for this move, which can be interpreted as a sign of interventionism in private companies, as the People's Party has already reported. But the lack of definition of STC, which has long delayed the request for approval from the Ministry of Defense to effectively take over 9.9% of the capital, has finally decided the government to take this final step.
Although the operator's board of directors has not officially commented on the operation of SEPI (it has only issued a relevant fact mentioning the goal of creating shareholder value included in its strategic plan), the sources cited indicate that Both Pallete, BBVA and La Caixa were aware of the government's intention, “although the exact timetable was not necessarily known”. In fact, there have been numerous contacts between all parties in the past few weeks.
According to reports, CaixaBank, La Caixa Foundation and BBVA have not made any statements regarding the government's move to make SEPI a shareholder in Telefónica Hugo Gutierrez. Although various sources in the industry are positive about this move, they believe it provides stability from a shareholder perspective. For the Catalan bank, it is a strategic investment that they want to maintain at current levels, as they have assured since STC's interest became known. Like BBVA, which also has no intention of leaving telecommunications. “It is positive that investors are interested in Telefónica and that they are providing stability,” said CEO Onur Genç in the latest earnings presentation about Saudi interest.
Political reactions
It didn't take long for the issue to reach the political stage within the government itself. Sumar's congressional spokesperson, Marta Lois, wanted to honor the creation of the operation and ensure that it “essentially responds to a demand” that Yolanda Díaz “transferred” to Nadia Calviño, to “recover such a strategic company for the state.” like Telefónica.” Yolanda Díaz herself remembered this demand when STC’s entry into Telefónica became known. “The state must be present in our country's strategic companies. We said months ago that it was necessary. Today it is reality,” said the minister via her X account.
For his part, the PP's deputy economy minister, Juan Bravo, accused the government of interventionism because it wants to “occupy” the private sector, saying that there is no justified reason for the acquisition of up to 10% of Telefónica. “Without a doubt, it is an interventionist position of the government whose sole purpose is to adopt it, in this case first in the private sector,” he explained in statements to Congress after accusing the executive branch of this PP leader Alberto Núñez Feijóo and that he had learned of the news through the media.
The head of Vox, Santiago Abascal, views the operation and the reasons given for it with “complete suspicion”. “The government's intention is never to defend Spain's strategic sectors, but in any case to acquire greater power,” he explained. The spokesman for the Esquerra Republicana (ERC) in Congress, Gabriel Rufián, goes further and advocates the total nationalization of Telefónica so that it is not put “at the service of the market in the worst sense of the word”.
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