Telefónica’s Increasing Stake in Telco
Spanish telecommunication giant Telefónica is buying Telco’s preferential shares to boost its interest from 46% to 66%, and then, if approved by the relevant authorities, to 70%. As the owner of the biggest single stake of 22.39% in Telecom Italia, Telco appoints the majority of Telecom Italia’s board. The latter is a huge player in the Argentinean, Brazilian, and Paraguayan wireless markets. These preferential shares, however, do not come with voting rights; hence, Telefónica’s voting stake remains the same at 48.16%, in line with the rules set by Brazil’s telecom regulator, Anatel. No trouble so far.
Meanwhile, other Telco shareholders have offered Telefónica the option to acquire their shares and convert preferential shares to ordinary, potentially raising Telco’s voting rights to as high as 64.9%. This is the part that makes regulators ...
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