TeliaSonera has confirmed it is in talks with Spanish fixed-line operator Jazztel and other parties regarding a sale of its local mobile operator Yoigo.
The Stockholm telco’s disclosure follows that of Jazztel which confirmed talks regarding Yoigo…
TeliaSonera has confirmed it is in talks with Spanish fixed-line operator Jazztel and other parties regarding a sale of its local mobile operator Yoigo.
The Stockholm telco’s disclosure follows that of Jazztel which confirmed talks regarding Yoigo earlier this morning.
A Bloomberg report claimed the Madrid-listed telco could offer €500m (US$646m) for the asset, which would be substantially less than the €1bn (US$1.29bn) TeliaSonera was holding out for in a sale process that fell apart in April 2013.
However, TeliaSonera would likely get stock in Jazztel – itself an acquisition target – which would give the Scandinavian group exposure to the Spanish fibre market and perhaps lead to further consolidation in the country.
According to Berenberg analyst Wassil El Hebil, Jazztel is making an opportunistic move for the asset. The previous consensus was that the most likely buyer would be operators such as Orange and Vodafone, which alongside Telefonica dwarf Yoigo in the market.
El Hebil said that Jazztel “could be playing the ‘remedies card’ to steal Yoigo (the fourth-largest mobile network) from Orange and Vodafone”.
The analyst explained that although Orange and Vodafone would be able to extract higher synergies from an acquisition of Yoigo than Jazztel, these may be offset by the significant remedies they may have to pay out to get a deal past regulators.
Should Jazztel lose out on Yoigo to one of the big mobile players, its position in mobile could yet be strengthened. Jazztel operates an MVNO and if the Spanish market shrank from four to three, remedies may be put in place to strengthen the MVNO market as they have been in Germany.
Federico Colom, finance director for Orange’s Spanish unit, was quoted as saying the company would be interested in acquiring either Yoigo or Jazztel.
Meanwhile, his counterpart at Vodafone Spain, Antonio Coimbra, has said his company is not focusing on acquisitions in the country at present. Instead it is concentrating on integrating cable operator Ono, which it acquired earlier this year for €7.2bn, into its business.
TeliaSonera said it was reviewing its presence in the Spanish mobile market in July, after describing Yoigo as a sub-scale business due to its 7% market share.
CEO Johann Dennelind said that competition was fierce in Spain due to a strong convergence trend and that it was putting pressure on its mobile-only offering.
