The board of directors of Telefónica met yesterday morning to address for the first time the disembarkation of Saudi Telecom in the company's shareholding through the purchase of 9.9% of the capital. The operation, which makes the Saudi group the first shareholder, has not yet been notified to the central government, which will predictably impose conditions on the new investor.
According to the sources consulted, the president of Telefónica, José María Álvarez-Pallete, reported the details of the investment and the company's directors expressed their concerns, related to aspects such as the permanence of the Saudi fund, the discretion with what bought the stock and his possible interest in joining the board. Telefónica sources do not report the content of the meeting.
The message from Saudi Telecom is that at the moment there is no intention to join the council. However, the Saudi telecommunications group plans to request permission from the central government to exercise political rights over the entire stake, acquired for 2.1 billion euros. The Saudi group, controlled by the sovereign fund Public Investment Fund, has 5% of Telefónica directly and another 4.9% in derivatives from Morgan Stanley, parked pending permission from the Government.
Spanish legislation allows taking up to 5% in a group associated with Defense such as Telefónica and raising the stake to 9.9% on the condition that it does not exercise political rights, unless the Government gives authorization.
Yesterday's meeting of the board of Telefónica, of an ordinary nature, was the first since on September 5 Saudi Telecom announced an investment built on small purchases of shares since February. He did it secretly from Telefónica, which was informed on the same day of the arrival of the new investor. The Government also knew it at that time.
Álvarez-Pallete has had the opportunity to meet twice since then with the first managers of Saudi Telecom. The first was during the visit he made to Riyadh with the CEO, Ángel Vilá, just after he found out. The second was these days, at a meeting of the GSMA business association, in which Telefónica and Saudi Telecom share a seat.
The Spanish Government, which has two months to make a decision from the moment Saudi Telecom notifies the purchase, will set conditions to limit the outflow of dividends and avoid the sale of assets, according to Bloomberg.
CaixaBank and BBVA, with 4.8% each, have directors at Telefónica. They are Isidre Fainé and José María Abril.
