Government’s Unexpected U-Turn in Telefónica Acquisition Leads to a 2.26% Rise in Shares, Sparking Financial Implications

Government aims to quickly reach 10% stake in Telefónica, causing stock to surge to May highs

In a press conference on Tuesday, Government spokesperson Pilar Alegra announced that the Executive expects the State Society of Industrial Participations (Sepi) to acquire 10% of Telefónica in a short period. This revelation came after Sepi disclosed that it currently holds 3% of the telecommunications operator’s shares.

However, Alegra’s statement had an unexpected effect as Telefónica’s shares rose for the first time since May 2023. By 4:30 p.m., the shares had reached 4.08 euros, representing a 2.26% increase. The rush to complete the operation could potentially increase the final cost by tens of millions of euros, as Sepi will need to disburse an additional 1,600 million euros to reach the 10% ownership stake.

The initial estimated cost for this acquisition was at 2.1 billion euros, but with these new developments, it is crucial for all stakeholders to closely monitor the situation and its potential impact on the telecommunications industry and the government’s budget.

The value of Sepi’s current ownership stake is over 700 million euros at market price, and to reach a 5% stake in the capital, an additional investment of over 1 billion euros is needed.

Alegra stated that this operation will be completed as quickly as possible without affecting share prices.

The government is now faced with significant financial implications due to this development compared to their initial estimated cost.

In conclusion, it is vital for all stakeholders to keep a close eye on this situation and its potential effects on both the telecommunications industry and government budget.

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