British telecom investment company Zegona said it was in talks with Vodafone about a potential acquisition of the British telecom giant’s Spanish business, confirming a media report.
“(Zegona) confirms that it is in discussions with Vodafone Group in connection with the potential acquisition, and with banks in relation to its financing,” it said.
It added that a deal was subject to agreement on final terms and funding, as well as due diligence.
“Therefore, there is no certainty that the potential acquisition will proceed, nor as to the final terms of any such potential acquisition,” it said.
Spanish newspaper Expansion, citing sources close to the matter, had reported that Zegona was seeking financing for a bid for all or 50% of Vodafone Spain. It noted that it would be easier for Zegona to obtain financing for the latter.
The bid could value the company at more than 5 billion euros ($5 billion), it said.
Vodafone CEO Margherita Della Valle launched a strategic review of the Spanish unit earlier this year. She said in May she was open to “structural change”, indicating a sale was an options for a business that has battled intense price competition in recent years.
Vodafone is one of the three largest telecom operators in Spain together with Telefonica and the local unit of France’s Orange. The latter is in the process of merging with MasMovil, the fourth largest operator.
Zegona, set up by former Virgin Media executives Eamonn O’Hare and Robert Samuelson to invest in European telecoms, bought northern Spanish cable company Telecable in 2015.
It sold Telecable to rival Euskatel in 2017, taking a stake in the enlarged group, which in turn was sold to MasMovil for nearly 2 billion euros in 2021.
Zegona’s previous investors have included Marwyn Asset Management, Artemis Investment Management, Fidelity, Capital Research and AXA, according to LSEG data.
London-listed shares in Zegona were suspended at the company’s request. Vodafone’s shares were up 0.3%.
A Vodafone spokesperson declined to comment.
