Fresh rumours pertaining to Telefonica’s exit from the U.K. mobile market emerged on Tuesday when Liberty Global and TalkTalk were both named as potential suitors for O2.
Sources cited by Spanish newspaper El Economista claimed that Telefonica has held informal, non-binding talks with Liberty Global – parent of U.K. cableco Virgin Media – about a potential acquisition of O2, and conducted similar negotiations with low-cost triple-play provider TalkTalk.
Some reports also cited a separate Spanish media outlet that named Sky as a possible buyer too; however, these reports are proving difficult to verify at this point.
According to El Economista, Telefonica chairman César Alierta hopes to strike a deal for O2 worth €11.5 billion-€12 billion, as the company looks at ways it can reduce its hefty debt.
The report emerged days after The Sunday Times reported that Telefonica is holding talks with Hong Kong’s Hutchison Whampoa about a deal for O2 worth as much as £9 billion (€11.8 billion).
Telefonica’s exit from the U.K. has been on the cards since BT entered exclusive negotiations to acquire rival EE for £12.5 billion in mid-December. BT also considered a move for O2 before settling on EE, and Reuters claimed that Hutch would approach whichever company was rejected by the U.K. incumbent.
Telefonica and Hutch have done business before, merging their respective operations in Ireland. It is worth noting that EU approval of that deal came with strict conditions designed to safeguard competition; there can be little doubt that a merger between the two in the U.K. would attract even closer scrutiny.
