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Telefonica “considering” stock market float for O2

James Pearce
June 22, 2016

UK operator confirms its Spanish parent company is looking at plans to offload shares in its UK arm with an IPO

Telefonica is “considering” an Initial Public Offering (IPO) for shares in O2, the UK operator has confirmed.

A spokesperson for O2 confirmed reports in the Financial Times claim the Spanish operator may look to float its UK arm in order to raise cash, just a month after a proposed takeover by Three-parent CK Hutchison was rejected by the European Commission.

The reports claim Telefonica has opened talks with a number of banks about a possible IPO, with flotation on in London being the most likely outcome. However, O2 said it is considering all options, with a decision yet to be reached.

A spokesperson for O2 told Mobile News: “An IPO is being given serious consideration however we continue to look at all options including a sale to private equity. No decision has been made.”

nO2 for Three

On May 11, European Commissioner Margrethe Vestager ruled to block Hutch’s proposed £10.25 billion acquisition of O2 after more than a year of negotiations. According to the FT, Telefonica has asked Hutch to end its exclusivity agreement that was part of the takeover bid early, which will allow it to open talks with other potential suitors.

O2 CEO Ronan Dunne has been linked with a possible management buyout, worth around £8.5 billion, backed by private equity firms. Dunne would have left O2 UK had the merger with Three been approved.

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