Vodafone is working on a takeover bid for Spain’s number four operator Yoigo, according to a report in The Sunday Times citing unnamed sources.
Yoigo’s parent TeliaSonera is looking to sell its 76% stake in the business, the paper said with…
Vodafone is working on a takeover bid for Spain’s number four operator Yoigo, according to a report in The Sunday Times citing unnamed sources.
Yoigo’s parent TeliaSonera is looking to sell its 76% stake in the business, the paper said with reference to City sources, adding that it could sell for anything between €750m and €1.2bn.
TeliaSonera put Yoigo up for sale last year, but put the process on hold over Christmas as it could not achieve its €1bn valuation. France Telecom, which was widely seen as the most likely buyer, was said to be considering an offer of around €800m last year.
Last September Vodafone CEO Vittorio Colao said his company was considering a bid for Yoigo and would examine the potential price of the asset, as well as the opportunities it could present in Spain.
France Telecom and Telefonica are also in for the operator, yesterday’s report said.
A high-level Spanish industry source, speaking to TelecomFinance, said he felt that Vodafone and Yoigo were the right fit. However, with reference to recent suggestions that Vodafone might table an offer for Kabel Deutschland (KDG) in Germany, he thought a bid at this time would be counter intuitive.
The UK-based telco is rumoured to be looking at making a €9bn bid for cableco KDG. Both sides are said to have hired banks to advise on the situation.
Today Vodafone’s CEO reportedly said that the company could afford to make investments in Europe without selling off its 45% stake in its US joint-venture Verizon Wireless.
Both Vodafone and TeliaSonera declined to comment on Sunday’s report.
The sale of Yoigo to a direct competitor in the country would represent significant consolidation as it would reduce the number of operators from four to three.
In light of the landmark Orange Austria case last year, lawyers previously told TelecomFinance that a bid for Yoigo from one of the existing operators in Spain would face antitrust hurdles. The lawyers speculated that in return for regulatory approval buyers already active in the market would have to sell spectrum and commit to granting MVNOs greater access to the their network.
However, Yoigo’s market share is much smaller than Orange Austria’s share in its home market, which implies that smaller antitrust commitments might be sufficient. Yoigo has around 6% of the Spanish market by voice lines, whereas Telefonica has roughly 37%. Vodafone has a 27% share, France Telecom’s Orange has 21% and MVNOs account for the rest. An acquisition would give Vodafone a third of the market.
