The Government is moving to defend the autonomy of Telefónica and is studying formulas to rebuild a hard core of Spanish shareholders that would serve as a counterweight to Saudi Telecom, the operator controlled by the State of Saudi Arabia. The State Society of Industrial Participations (SEPI) has confirmed this Tuesday to the National Securities Market Commission (CNMV) that is considering buying a stake in Telefónica.

Saudi must ask the Government for permission if it wants to exercise shareholder control in Telefónica above 4.9% and meets its objective of reaching 9.9%. A request that Saudi Telecom has not formalized. Now, the possible entry of SEPI into the capital, alone or in coordination with other national business groups, would allow the formation of a reinforced stable core of Spanish partners in its attempt to shield the control of a group that the Government considers strategic, due to its links with defense and national security and its key role in the telecommunications and technology sector.

The Government yesterday avoided commenting on whether among the maneuvers it is studying to velar for the autonomy of the company and, ultimately, for its Spanishness, There is the possibility of the public holding company of industrial holdings SEPI purchasing a share package in Telefónica, supported by Spanish businessmen, as El Confidencial had anticipated. SEPI itself has had to confirm that it is carrying out an “internal exploratory analysis” on a possible acquisition

The SEPI arm

The taking of 5% by SEPI, which is the package that the sector manages as well as the one that the public holding company is considering assuming, would allow the creation of a stable core of Spanish shareholders, together with BBVA (4.87%) and Caixabank (3.5%, which adds another 1.5% in the hands of Criteria, the investment arm of Fundación Caixa). The sum of the three packages would be close to 15% of the telecom’s capital and would exceed the 9.9% that Saudi Arabia aspires to control.

SEPI has already led corporate movements in the last year to ensure Spanishness and control of companies that are considered strategic. The public holding company has raised its participation in the technology company Indrawhich the Government wants to promote the large national defense group, and already controls almost 28% after the departure of Corporación Financiera Alba, from the March family.

SEPI is the investment arm with which the State It controls a multitude of totally or mostly public companies, such as Correos, Navantia, RTVE, Agencia Efe, Tragsa or Enusa. The holding company also controls minority stakes in strategic sector groups, such as the aeronautical group Airbus (4.12%), Alestis Aerospace (24.05%), Ebro Foods (10.36%), Enagás (5%), the group of nuclear waste Enresa (20%), the satellite group Hispasat (7.41%), the airline group IAG (2.53%) or the manager of the electrical system Redeia (20%).

The acquisition of that participation would mean the return of the State to the capital of Telefónica 24 years later. During the nineties, the governments of Felipe González and José María Aznar designed and executed several privatization processes that were formally concluded in 1997, but were definitively completed until the sale in 1999 of the last residual public participation of 0.2% that was still remained.

The emergence of Arabia

Saudi Telecom (STC), the state-controlled operator of Saudi Arabiaaspires to become the main shareholder of Telefónica, with a 9.9% stake, and to achieve this it must have the explicit permission of the Spanish Government. Almost two months have passed since STC announced its entry into the capital of Telefónica, the Saudi group still has not formalized the request for authorization before the Government to complete control of the 9.9% shareholding package, it still does not reveal when it will do so and it continues without confirming whether he will request to sit on the board of directors of the Spanish group.

Over the last two months, the Government has insisted on highlighting the strategic nature of Telefónica for Spain and its intention to ensure the company’s autonomy and national interests at all times. Now the acting Executive mobilizes the SEPI, dependent on the Ministry of Finance, to explore its entry into the telecom shareholding as a possible shield. A move that would create a Spanish counterweight in the shareholding without the need to veto STC from completing the purchase of 9.9%, which could generate a clash with a key economic partner for Spain such as Saudi Arabia (traditional oil supplier and preferred customer of national strategic groups such as Navantia, large construction companies or the AVE consortium to Mecca).

Saudi Telecom, 64% controlled by one of Saudi’s sovereign wealth funds, is moving to calm things down and confirm the friendly intentions of the operation. Saudi Telecom took advantage of the presentation of its quarterly results to promise “cooperation” with Telephone and show their full “confidence in the growth and upward potential” of the group led by José María Álvarez-Pallete.

Saudi Telecom has acquired a direct participation of 4.9% of the shares of the Spanish company and another 5% indirectly through financial derivatives, for a total of about 2.1 billion euros. The Saudi group can currently only exercise the voting rights corresponding to that direct package of 4.9%, and sources familiar with the Arab company’s plans confirm that its intention continues to be to execute these derivatives to reach the 9.9% level. .

The Arab operator must ask permission from the Ministry of Defense and have the subsequent ‘ok’ from the Council of Ministers if it intends to exercise political rights up to 9.9% or if it confirms its intention to have a presence on the board of directors of Telefónica. as established by the regulation of the ‘anti-takeover shield’ for strategic companies linked to defense. He Government It cannot make a decision on Saudi participation if the new investor does not make a move and activate the process to exceed the current level.