Telefonica in EUR26bn takeover of O2 mobiles
31 October 2005, MADRID — Spanish company Telefonica has staged a friendly takeover of British mobile phone group O2 for EUR 26.1 billion.
31 October 2005
MADRID — Spanish company Telefonica has staged a friendly takeover of British mobile phone group O2 for EUR 26.1 billion.
The former arm of British Telecom has been seen as a bid target for several months and recently attracted interest from Deutsche Telekom and Dutch group KPN.
Telefonica, which has a agreed a deal with the board of the UK company, said O2 would retain its existing brand and continue to be based in the UK.
The two companies said they had complementary operations with O2's services in the UK, Germany and Ireland adding to Telefonica's strength in Latin America and Spain, where it has 80 years of telecoms experience.
Telefonica had around 173,000 staff at the end of last year, while its customer base stood at 145 million in June.
O2 shareholders, including many small investors who picked up stock at the time of the demerger from BT in 2001, will receive 200p a share if the deal goes through. O2 closed on Friday night at 164.25p.
Peter Erskine, chief executive of O2, said the company's board was recommending that shareholders accept Telefonica's offer.
He said: "The board is recommending it. Obviously, the shareholders will have to decide whether they do accept it. We would envisage if they do, it would close round about January or February.
"It is very good for shareholder value. It's an all-cash offer. It's EUR 2.94 a share, which is somewhere in the range of a 25 percent premium over the last three months. It's also good for customers. They have no overlapping territory, so they will be able to offer our customers better roaming and better services around the world.
"Finally, it's very good for our people. Because there's no overlapping territories, we can really build on what we've got, as opposed to having to integrate and rationalise jobs."
[Copyright EFE with Expatica]
Subject: Spanish news