Saturn can be the name of a planet or that of a god that devours its children or, with a slight ellipsis, that of a German electronics chain that promises cheap televisions. However, Saturno is also the code name of Saudi Telecom, the Arab group that has been secretly preparing for months to join Telefónica to become the first shareholder, according to financial sources.
The operation began months ago, in February, and was forged behind the backs of the Government and Telefónica, in a triangular movement in which there were acquisitions of shares in the market, an intense legal struggle to measure the scope of the investment and also a reserve corporate within Saudi Arabia's Vision 2030. There was also no prior contact with Zarzuela, sources from the Royal House indicate to María Ángeles Alcázar.
In corporate operations it is common to use code names to avoid arousing suspicion in the market. Each of the participants responds to a particular nomenclature, as is the case of Saturno, the way in which the dozens of advisors involved in the Saudi landing at Telefónica have long designated Saudi Telecom. The integration between CaixaBank and Bankia was baptized Algarve and one of Cellnex's large acquisitions, the Hutchison towers, was nicknamed Fog, after Heidi's dog.
It was in February of this year when Saudi Telecom commissioned Morgan Stanley to very discreetly begin purchasing Telefónica shares in the market, without substantially altering the price or drawing attention to other potential interested parties. The goal was to reach 9.9%, which was achieved for 2,100 million euros, practically the market price, without premiums or advertising.
It is still not known at what precise moment the operations were carried out, but between February 6 and March 6 Telefónica shares rose 15% on the stock market, while in July, for ten days and before the presentation of results , there was a 10% peak.
They were the two moments of best performance of securities often punished in the market, especially at the end of July, when Telefónica Deutschland lost an important client. Between August 7 and September 1, the stock rose 9%, although again it is not known for now which part corresponds to Morgan Stanley and which to the invisible hand of the markets.
The legal work has been carried out by Allen
However, more refinement had to be made because Royal Decree 571/2023 approved by the Government in July required any investor who bought more than 5% in a Defense company to go through the Council of Ministers. The stake could be as high as 9.9%, but it would also need government authorization to exercise political rights, which is what Saudi Telecom aspires to.
Telefónica had been included at the beginning of the year on the list of strategic Defense suppliers and, for that reason and in view of the fact that it would fall under the assumptions of royal decree 571/2023, Saudi Telecom, resorting to bank debt and its own resources, bought the 5% direct and another additional 4.9% through derivatives. He has them parked and will execute them if the Spanish Government gives the go-ahead.
In the corporate sphere, February is also a key moment because at that time Telefónica and Saudi Telecom signed a strategic agreement that allowed the Spanish company to add one more partner to its catalog in 52 countries. The Saudi partner, on the other hand, saw the light of opportunity when he saw something more than a friendly competitor.
The relationship with Telefónica, Saudi Telecom said at the time, is in line with the Dare 2.0 strategy of the Saudi group and is part of "Saudi Arabia's vision for 2030" by responding to needs in areas such as artificial intelligence, the metaverse and other innovations. To say Vision 2030 is to talk about the country's most ambitious economic plan, led by Crown Prince Mohamed bin Salmán.
The corporate circle is closed by the presence of a Spanish executive from Telefónica on the management committee of Saudi Telecom. He is José del Valle, former CEO of Telefónica Media Networks, the only executive at the top of the Saudi group who is not Arab.
The arrival of Saturno at Telefónica was made without informing the Government, who was notified of the movement on Tuesday night, which is when the operation was publicly reported.
There were also no contacts with the Royal House. "In the House of His Majesty the King, no communication has been received from the STC company informing about the purchase of Telefónica shares," Zarzuela sources tell María Ángeles Alcázar.
Telefónica has not had any special information either, which is why the president of the company, José María Álvarez-Pallete, and the CEO, Ángel Vilá, traveled to Saudi Arabia yesterday to meet with the leadership of Saudi Telecom.
