Telefonica to 'reflect on future of UK business' - chairman

Nieuws Algemeen Spanje 13 MAY 2016
Telefonica to 'reflect on future of UK business' - chairman

Telefonica has confirmed that it will stick by its promise to pay a dividend of EUR 0.75 a share this year even after the European Commission blocked the proposed sale of its O2 UK business to Hutchison. In the first annual general shareholders meeting chaired by new chairman Jose Maria Alvarez-Pallete, the company approved the dividend, with a first payment of EUR 0.35 per share in November and a second payment of EUR 0.40 per share to be distributed during the first half of 2017. Alvarez-Pallete said the shareholder compensation for 2016 represented a return of 7.9 percent, the highest per dividend among EuroStoxx 50 companies.

Telefonica’s chairman added that the company’s financial targets remained unchanged even though it had hoped to use the proceeds from exiting the UK market to reduce its EUR 50 billion debt. “After receiving the decision of the regulator, we will now enter a period of reflection to decide what is the future of our business in the United Kingdom,” he said.

Separately, Sky News reported that some of the world's largest buyout firms are considering a GBP 10 billion takeover approach to Telefonica for its O2 UK business. Apax Partners, CVC Capital Partners and KKR are examining a possible offer and some have already held preliminary talks with bankers about financing a deal, said the report.

Liberty Global, which owns Virgin Media in the UK, is also said to be interested in bidding for the operator, with Liberty Global CEO Mike Fries saying that it would be "strange" if his company did not consider a bid for O2, according to the report.

Categories:

Algemeen

Companies:

European Commission,  Liberty Global,  O2 UK,  Virgin Media,  Telefonica

Countries:

Spanje,  Verenigd Koninkrijk

Tags:

Shareholders & subsidiaries, Financial funding, M&A buyouts & divestments

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