News
Spanish incumbent reportedly still keen to exit U.K. via sale, or public spinoff.
Telefonica is weighing possible options for its O2 U.K. business as doubts loom over its planned sale to 3UK parent CK Hutchison.
Unnamed sources cited by Bloomberg this week claimed that the Spanish incumbent is considering restarting the sale process for O2, with cable group Liberty Global or private equity firms among the possible buyers. Other options on the table include spinning off a publicly-listed O2.
Telefonica is also said to be moving forward with plans to spin off its recently-created infrastructure holding company Telxius in a bid to soften the blow should the £10.25 billion deal with Hutch fall through.
Telefonica is keen to raise cash in order to pay off some of its hefty net debt, which stood at €49.92 billion at the end of December 2015.
A separate Bloomberg report earlier this week claimed that the European Commission is on the verge of blocking CK Hutchison’s planned acquisition of O2 due to concerns about the loss of competition.
The Hong Kong conglomerate’s concessions have reportedly failed to find favour with the Commission, and the deal could be formally blocked in a matter of weeks.
Hutchison recently revealed that it has struck capacity deals with Sky, Virgin, Tesco Mobile and UK Broadband that cover more than 40% of 3UK and O2’s combined network capacity. It has also pledged to freeze prices for the next five years and invest heavily in its U.K. operations.
Despite the concessions, the deal faces stiff opposition from the U.K.’s Competition and Markets Authority (CMA) and telco regulator Ofcom, which are concerned that reducing the number of mobile operators to three from four will lead to higher prices and ultimately harm consumers.
If this week’s reports are accurate, Brussels feels the same way.
