Telefónica to Eat Its Mobile Arm
In a regulatory filing today, the Spanish incumbent said it was proposing a merger of the two companies, and is offering four Telefónica shares for every five Telefónica Móviles it doesn't already own. The boards of the two companies will examine the bid before the end of this month.
The move valued each Móviles share at €10.66, higher than Wednesday's closing price of €10.49. The stock ended today up 23 euro cents, more than 2 percent, at €10.72, though it did go as high as €11.50.
Telefónica's share price dipped slightly, by 12 euro cents to €13.20.
The carrier's aim is to unite the two businesses to get the full benefits from future technical and service convergence, the driving force behind similar moves by Telecom Italia (TIM) , which swallowed Telecom Italia Mobile SpA (Milan: TIM), and Orange (NYSE: FTE), which ate Orange SA (London/Paris: OGE). (See Euro Giants Buy Back Offspring and Telecom Italia/TIM Merger Approved.)
Telefónica has been mighty busy in the M&A world of late, having acquired Cesky Telecom a.s. and U.K. mobile operator Telefónica Europe plc (O2) in the past year, as well as increasing its stake in Chinese partner China Netcom Corp. Ltd. (NYSE: CN; Hong Kong: 0906). (See Telefónica Boosts Chinese Ties, Telefónica Swoops In on O2, and Telefonica Buys Cesky Telecom.)
The company has also been rumored to be bidding for Dutch incumbent KPN Telecom NV (NYSE: KPN). (See Dutch Put KPN on the Block.)
— Ray Le Maistre, International News Editor, Light Reading