O2 shareholders support Telefonica bid

3 Jan 2006

Shareholders owning some 62.7pc of O2 have agreed to tender their stock as part of Telefonica’s €27bn bid for the company. As a result, Telefonica has declared its offer for O2 as “unconditional as to acceptances”.

As of noon yesterday (2 January) shareholders owning 62.72pc of O2 had agreed to tender their stock. The company had set an acceptance condition of 90pc when the bid was made public on 31 October last. Shareholders can still tender their shares in O2 until 20 January, Telefonica said in a statement.

The deal will mark the largest takeover of a UK communications firm since France Telecom shelled out €45bn for Orange in 2000.

The European Commission is currently investigating the legality of the merger. The Commission is scheduled to rule on the takeover on 10 January next. Telefonica says that it expects the offer to go “wholly unconditional” later this month.

O2 was spun off from BT in 2001 and has around 24.6m customers in Ireland, the UK and Germany. Telefonica already owns a 4.97pc share in O2. Conclusion of the deal would give Telefonica access to two of Europe’s largest mobile markets – the UK and Germany.

By John Kennedy