Spain’s Telefonica Chairman, Jose Maria Alvarez-Pallete, said today the company would hold a partial sale or an IPO for O2 before early 2017, four months after regulators blocked its takeover.
The Spanish group was denied a £10.25bn payday when attempts to merge O2 with rival network Three, owned by Hong Kong-based CK Hutchison, were blocked by Europe’s competition authorities.
Telefonica now says preparations for an initial public offering of O2 UK are underway. It will keep a majority share in the mobile network.
Telefonica will also list its infrastructure business Telxius, which owns mobile masts and fibre-optic cables, on the Barcelona, Bilbao, Madrid and Valencia stock exchanges. It also plans to keep a majority stake in the business.
Telxius sells wholesale access to its 15,000 telecoms towers in Spain and to its 31,000km of submarine fibre-optic cables that connect Europe to the US and South America. Telefonica set up Telxius as a new company in February, under the control of Alberto Horcajo, former financial chief at Telefonica Brazil.
Earlier this year Margrethe Vestager, the European competition commissioner, refused to allow O2 to merge with Three in the UK, saying it would reduce choice and increase prices.
Following the collapse of the deal with Hutchison, Telefonica’s plan to float off its British business had been on hold pending the result of the EU referendum.
Hutchison, which owns Three alongside a host of other assets including ports and hotels, had pursued the deal because it wanted to make efficiency savings and increase its share of scarce radio spectrum capacity. It is challenging the European Commission’s decision in the courts.
