The entry of the State into Telefónica officially materialized at the end of last March, when SEPI took over 3% of the shares of the teleoperator thanks to the resources of the 2023 Budget, extended during 2024. However, everything began to orchestrated several weeks earlier, when the Ministry of Finance contributed the unusual amount of 500 million euros to the State Industrial Participation Company through a capital contribution, as reflected in a report from the General Intervention of the State Administration (IGAE). ).
In chapter 8 of the document, referring to financial assets, the department headed by María Jesús Montero explains that part of the increase in payments accumulated in this heading is due to “the equity contribution to the State Society of Industrial Participations (SEPI) by 500,000 thousand euros.” Although the ministry does not specify that the movement is aimed at financing the entry into Telefónica’s shareholding, the figure is close to the 700 million euros at which 3% of the operator was valued.
A transfer of these dimensions is, in fact, very unusual, as shown by the IGAE’s own data. In the same period of the previous year, that is, February 2023, zero euros were allocated to this item. The same thing happened in January 2024. That is, everything indicates that in March a transfer of no less than 200 million will be reflected again – to cover the difference up to the 700 million at which 3% of the shares were valued in the moment of announcement.
The Government’s plans are for SEPI to take 10% of Telefónica’s shares as soon as possible, an operation decided in mid-December. However, everything became complicated after the refusal to prepare public accounts for the year 2024 and the subsequent impossibility of budgeting the necessary transfer. To solve it, the Ministry of Finance decided to draw on funds from the 2023 Budget, extended during this year.
With them, as confirmed by the Treasury last week, this first acquisition of 3% was covered. In addition, sources from the ministry advanced, the same formula will be used to complete the operation and achieve the 10% objective in the short term. That is to say, everything indicates that in the next State expenditure budgets, which are published month by month, this item will be increased again to cover the complete acquisition, which is estimated at around 2.1 billion euros.
Unrest in the capital
The movements have caused a strong shake-up in the company. Last December, the Council of Ministers ordered the SEPI to carry out the acquisition of up to the aforementioned 10% stake in Telefónica’s capital. If it reaches that level, the State would become the main shareholder of the company, ahead of STC, controlled by the sovereign fund of Saudi Arabia, which seeks to reach 9.9%. In this case, the Arab operator acquired 4.9% of Telefónica directly in shares and 5% through derivatives. To exceed 5%, STC must receive approval from the Spanish Government itself, due to Telefónica’s strategic nature in national security and defense.
The double entry of STC and SEPI breaks the the status quo of the company in recent decades, a period in which CaixaBank and BBVA have remained the main shareholders, with a presence on the board of directors.
One of the open questions focuses on the possible entry of SEPI representatives on the board of directors of Telefónica. The teleco has called a shareholders meeting for next April 12, and on the agenda is only the re-election of Isidro Fainé, in this case as a proprietary director, as well as Javier Echenique, Peter Löscher, Verónica Pascual Boé and Claudia Sender Ramírez, as independent directors. In addition, it will ratify the appointments of Solange Sobral Targa and Alejandro Reynal as independent directors.
However, as stated in the Regulations of the Meeting, shareholders representing at least 3% of the capital may request a supplement to the call, including one or more items on the agenda. This request must be made within five days following the publication of the call, a period that has already expired, meaning that this meeting will not be able to appoint directors other than those already included in the proposed resolutions on the agenda.
Telefónica, which in a few days will celebrate its centenary, a date very marked by its president, José María Álvarez-Pallete, stated last week that the interest of SEPI demonstrates that it is a leading, strategic and attractive company not only in the field of telecommunications but also in the development of the whole of the new digital era, both in Spain and internationally. “At Telefónica we will continue to focus on the execution of the 2023-2026 Strategic Plan to continue creating value for shareholders and provide the best service to customers,” said the teleco.
In the market it is believed that the SEPI is going to accelerate with new purchases of Telefónica shares in the market, to avoid an increase in the price, and its banks could carry out block operations, such as those carried out in recent weeks. In recent weeks, the matilde’s They have accelerated their rise on the stock market, reaching the level of four euros (last week they closed at 4.09 euros, and this Monday the stock market remains closed). Since the beginning of the year, the shares of Telefónica, which is involved in the takeover bid for its German subsidiary, have appreciated by around 13%.