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This morning, Zegona disclosed the discussion with Vodafone to the London Stock Exchange 

British investment telecom company Zegona has confirmed today that it is in talks with Vodafone regarding the potential acquisition of its Spanish business.  

“(Zegona) confirms that it is in discussions with Vodafone Group in connection with the potential acquisition, and with banks in relation to its financing,” the company said.

The deal is subject to agreements on funding and due diligence. 

“Therefore, there is no certainty that the potential acquisition will proceed, nor as to the final terms of any such potential acquisition,” the firm continued.

Spanish newspaper Expansion reported that Zegona was interested in Vodafone’s Spanish business, which has been the subject of takeover interest for some time. 

The value of the potential deal has not been disclosed by either company. Although, according to Expansion, Zegona is searching for financing to buy a maximum 50% stake in the company, which could value the whole company at over €5 billion. 

Zegona’ strategy, as detailed on their website, is to invest in businesses in the European TMT [technology, media and telecom] sector with the objective to improve their performance to deliver attractive shareholder returns with a ‘Buy-Fix-Sell’ Strategy’. 

The nature of the Spanish telecoms market is highly competitive, which Vodafone has is known to lament. Competition is fierce with Movistar, Orange, and MásMóvil in an ongoing price war.  

Because of this, Vodafone had long hoped that market consolidation would provide a solution to these issues, with rumours of a potential merger with MásMóvil finally withdrawn after the latter merged with Orange last year. 

In last quarter’s earnings call, Vodafone CEO Margarita Della Valle said that “structural change” was very much necessary in the Spanish market, in the context of market conditions. She said the company was “considering a range of options” but it was too early to comment. 

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