TeliaSonera sounding out EUR 700 mln Yoigo sale - report

News Wireless Spain 21 JUL 2014
TeliaSonera sounding out EUR 700 mln Yoigo sale - report
TeliaSonera has begun sounding out the interest of operators such as Orange Spain and Jazztel in acquiring its Spanish mobile unit Yoigo, according to unnamed sources cited by El Economista. Before officially kicking off a sale process, the Swedish parent company has held initial talks with representatives of Orange and Jazztel with a view to a possible transfer of assets. The move follows the publication of Yoigo’s second-quarter results last week, which saw the operator’s net sales drop nearly 20 percent year-on-year to the equivalent of SEK 1.81 billion. Commenting on the results, TeliaSonera CEO Johan Dennelind said Yoigo remained “sub-scale” and that “we are reviewing our future presence in the Spanish market”. Like other mobile-only operators, Yoigo has struggled to compete in a Spanish marketplace in which deeply discounted all-inclusive bundles of fixed and mobile phone, television and broadband services continue to dominate.

After eight years of activity in Spain, Yoigo is the country’s fourth largest mobile operator, boasting over 4 million customers. However, its market share of 6.92 percent remains a cause of concern to TeliaSonera, which holds 76.6 percent of Yoigo’s stake. Earlier in the year, Dennelind said the Swedish company would need to consider other options for Yoigo if it could not reach a sustainable size in Spain through organic growth. When TeliaSonera sought to dispose of its Yoigo stake two years ago, it failed to attract bids matching its EUR 1 billion valuation from interested companies such as Vodafone and Orange. According to the sources cited by El Economista, that price has now declined significantly to the point that TeliaSonera would be satisfied with around EUR 700 million, some nine times Yoigo’s EBITDA for 2013.  

Categories:

Mobile

Companies:

Telia,  Jazztel,  Yoigo,  Orange Spain

Countries:

Spain

Tags:

Production planning & operations, Wireless, M&A buyouts & divestments, Market research

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