Pallete flies to Saudi Arabia to find out about STC Group’s intentions in Telefónica

Telefónica‘s chairman, José María Álvarez-Pallete, and the company’s CEO, Ángel Vilá, have embarked on a trip to Saudi Arabia on Wednesday to meet directly with the leadership of the operator STC Group and the country’s authorities to find out about their intentions for the Spanish telecommunications multinational.

The trip comes just hours after the Saudi giant announced that it had bought a 9.9% stake in the Spanish telecoms company, according to Expansión on Wednesday.

The transaction, which came to light last night, caught the Spanish multinational by surprise, which for the moment has only announced, through a statement to the Spanish Securities and Exchange Commission (CNMV), that it took note of STC’s friendly approach and its support for the management team, Telefónica’s strategy and its ability to create value.

STC Group sources told EFE that they had not informed Telefónica of this transaction until moments before issuing the statement to the CNMV.

Telefónica informed the CNMV of the transaction late on Tuesday.

Telefónica itself informed the CNMV last night that it had been informed of the deal only yesterday. Meanwhile, sources within Telefónica confirmed to EFE that senior executives were unaware of the deal yesterday.

STC Gropu CEO Olayan Alwtaid said they had no intention of acquiring control or a majority stake in Telefónica and that their investment demonstrates confidence in Telefónica’s management team’s strategy and ability to create value.

STC Group sources have not disclosed whether they intend to seek a seat on Telefónica’s board of directors, as it is still too early.

However, if they were finally authorised to hold 9.9% of the company’s share capital, they would be entitled to one or two seats, sources close to the operator told EFE.

The operation is pending the appropriate authorisations.