Shockwave: Government Sparks Surprise Share Acquisition Bid Amid Financial Concerns

Government aims to quickly reach 10% stake in Telefónica, causing stock to surge to May highs

In a surprising turn of events, the Government spokesperson, Pilar Alegra, announced at a press conference on Tuesday that the Executive expects the State Society of Industrial Participations (Sepi) to acquire 10% of Telefónica in a short period. This statement came after Sepi notified that it currently holds 3% of the telecommunications operator’s shares.

However, Alegra’s statement had the opposite effect, causing Telefónica’s shares to rise for the first time since May 2023. By 4:30 p.m., the shares had reached 4.08 euros, representing a 2.26% increase. The rush to complete the operation could potentially increase the final cost by tens of millions of euros, as Sepi will need to disburse an additional 1,600 million euros to reach the 10% ownership stake.

The financial implications of this development are significant for both Telefónica and Sepi. The initial estimated cost of acquiring a 10% stake in Telefónica was around 2 billion euros; however, with this new investment requirement, Sepi will need to spend an additional 700 million euros on top of that amount to reach its goal.

It is crucial for all stakeholders to closely monitor this situation and its potential impact on the telecommunications industry and government budgets. The government must find ways to mitigate any negative effects while still ensuring that it achieves its objectives.

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