Friday, September 08, 2023

Why STC bought a 9.9% stake in Telefónica

The operation took the Spanish operator's board, the government and the financial regulator by surprise. The investment bank Morgan Stanley was acquiring the shares, by order of the Arab firm, in small packages without taking control. Telefónica is attractive because of its robust dividend payments.

The acquisition of a 9.9% stake in Telefónica by Saudi Telecom Company (STC) caused surprise in various sectors. Firstly, within Telefónica itself, where its executives were unaware of the move. It also surprised the Spanish government, which considers the operator to be a key company in the country's strategic framework. Spanish banks were also caught off guard, missing out on an operation that promises significant commission earnings. The list continues with the European telecommunications industry, specialized analysts, and even the securities regulator.

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