Telefonica considering options for O2 in light of expected EC block on sale to Hutchison; Iliad considering bid
The Spanish telecoms group Telefonica [BME:TEF] is considering options for its UK mobile telecoms network O2 in light of the European Commission’s expected decision to block its agreed sale to CK Hutchison’s [HKG: 0001] Three network, The Sunday Times reported. The newspaper did not cite a source for the information.
CK Hutchison, a Hong Kong-based conglomerate, is likely to launch a legal challenge to the EC’s ruling, the item said.
It is expected that Telefonica will over the next few weeks talk to potential buyers for O2, according to the report.
The French mobile network operator Iliad [EPA:ILD] is thought to be mulling an offer for O2, the item continued. Xavier Niel is Iliad’s controlling shareholder.
Sky [LON:SKY], a UK-based satellite television operator, has been tipped as a potential buyer for O2, having offered to acquire part of the network that would be formed should the O2/Three deal proceed, the article noted. However, the report cited unspecified sources who said Sky would probably not be interested in buying O2 outright, the report said.
The newspaper said Virgin Media owner Liberty Global [NASDAQ:LBTYK] has also been suggested as a potential buyer for O2, although the UK-based media group might not want to spend GBP 10bn, having made several previous European acquisitions.
It is expected that Telefonica will consider listing its UK division or possibly spinning off its mobile masts, according to the report.
Separately, The Sunday Telegraph cited City analysts who argued that Hutchison might now look to the UK-based broadband service provider Talk Talk Telecom Group [LON:TALK] as an alternative target.
The prospect of the EC blocking its takeover of O2 or Telefonica abandoning the deal to pursue a cash injection could lead Hutchison to consider bidding for TalkTalk,the item said.
Sunday Times, Sunday Telegraph