One business day before the established deadline expires on Monday, Saudi Telecom has just notified the CNMV of its 9.9% stake in Telefónica. The owner of the shares that appears in the registry of the Spanish supervisor is not the Saudi telecom, but the State's sovereign fund, Public Investment Fund (PIF), which has 64% of the capital of the Arab company and which declares itself the ultimate owner. of investment in Spain.
The new shareholder is the sovereign wealth fund that manages close to 600,000 million euros in investments and that champions the Vision 2030 plan of the country's crown prince, Mohamed bin Salman, to reduce the country's dependence and invest internationally.
The chain of control starts from PIF, goes through Saudi Telecom and ends in a company 100% owned by the Saudi telecom called Green Bridge Investment Company SCS, based in Luxembourg. The acronym SCS stands for Société en Commandite Simple, which is a specific purpose vehicle as a limited company.
The moment at which the threshold to notify participation was crossed, according to the record, was this Tuesday, September 5, the same day the operation was made public and the Government and Telefónica were informed about the movement.
The purchase is broken down into a direct 4.9% of the capital consisting of 281.7 million shares and another 5% equivalent to 287.5 million shares through a contract with Morgan Stanley called Contingent Sale and Purchase Agreement.
Saudi Telecom has said the value of the entire stake is 2.1 billion euros. At today's market price, with a price of 3.85 euros, the value of all the shares is now 2,190 million euros.
The investor has achieved a latent capital gain of 90 million euros in one week thanks to the announcement of his entry into the company, which yesterday caused a 2% rise in Telefónica shares in the stock market despite the fact that in the CNMV records The notification still didn't show up.
The notification steps, which are activated every time 3%, 5%, 10% and other multiples of five are crossed up to the 30% takeover threshold, did not jump before, despite the fact that the shares have been purchased since February in trading operations.
Everything seems to indicate, according to financial sources, that Morgan Stanley took the opportunity until Tuesday to package the shares that it had been purchasing in a disaggregated manner in the market.
"On September 5, 2023, Green Bridge Investment Company SCS, acting on behalf of Green Bridge Management, purchased 4.9% of the issued shares and entered into a contingent share purchase and sale agreement on 5% of the shares, whose effectiveness is subject, among other things, to the approval of the Council of Ministers," says the new shareholder.
The derivatives that Morgan Stanley has been purchasing for months from banks and intermediaries in the market with the utmost discretion have now been packaged in a contract that expires on March 3, 2025.
This means that Saudi Telecom will be able to enjoy the dividends and the financial rights of the participation and, when the date arrives, decide whether to extend the agreement, cancel it or keep the shares over which it has a purchase right.
The Saudi investor has said that his intention is to take control of this 5% when the Council of Ministers gives the go-ahead, and maintains that by doing so he could also enjoy political rights and vote at the share meeting on this portion.
The truth is that he is already the first shareholder. BBVA, CaixaBank and BlackRock each separately declare 4.8% of the capital of the Spanish telecom company.
CNMV sources indicate that, in trading operations, notification periods may vary. Apart from the "specificities and partial exemptions", its function will be to verify that the investor has acted correctly in the market operation.
Banks can trade in the market exceeding 3% of capital without having to notify the CNMV. They are only obliged to do so when they reach 5%, which could have facilitated Morgan Stanley's movements, carried out with the utmost discretion for months and without altering the market value of the company.
