So, Telefonica have bought O2 the mobile phone network in the UK........A cash purchase!!!
Doubt this means that we'll get cheaper calls to O2 from Spain though!
Telefonica & O2
Just heard it on the news on Radio 2.....I guess it's been signed sealed & delivered, apparently O2 shares have gone up 20%
This is from The Times (Uk Edt) online..Haven't seen todays papers yet though.
Telefonica and O2 dial up £17.7 billion deal
Spanish mobile phones group Telefonica has launched a £17.7 billion agreed takeover offer for O2, in a move that could spark a bid battle for its much circled British rival.
Shares in O2 surged just under 24 per cent higher on confirmation of Telefonica's offer, rising above the 200p a share it has tabled to stand at 203.5p after nearly an hour's trading.
The huge advance strongly suggests that investors - many of whom are small shareholders - believe a rival bidder may force an auction for the British mobile group.
Telefonica, the world's fifth-largest mobile phones group, said taking over O2 - which has also been linked with potential predators such as Deutsche Telekom of Germany and KPN of the Netherlands - would enable it to enter the German and British telecoms markets, two of Europe's largest.
The Spanish group said it expected the deal, which should be completed by next January, to enhance its earnings immediately and promised O2 shareholders that they would still receive an interim dividend at the beginning of December.
As it launched its 200p a share cash offer, Telefonica said combining the two groups should generate annual savings of just under £200 million a year by 2008.
Bringing the two groups together would create considerable benefits based on economies of scale and would dramatically advance the takeover fever that has been gripping the sector for months.
Shares in Virgin Mobile rose 10 per cent this morning as some in the City predicted that Telefonica's move would spark renewed interest in telecoms providers and equipment resellers.
As it fleshed out its expected savings as a result of a deal, Telefonica added it had "identified but not quantified" further areas where it could cut costs, including in IT, product and software development, advertising and new services.
It made no specific statement about whether it planned to introduce job cuts as a result of a merger.
O2, which was part of BT until it was spun off as an independent listed company in 2001, employs 15,000 people and has nearly 25 million customers in Britain, Ireland and Germany. For the financial year to the end of March, it posted pre-tax profits of nearly £1.8 billion on revenues of nearly £6.7 billion.
The Spanish group's offer represents a premium of 22 per cent to the closing price of O2 shares last Friday. The shares have been driven persistently higher by talk of potential takeover interest in the British group, led by chief executive Peter Erskine.
Mr Erskine said of today's deal: "Since the emergence of O2 as a listed company in 2001, it has enjoyed considerable operational success and, in the process, delivered real value to shareholders. This transaction brings together two companies which are growing strongly with highly complementary geographical activities."
Management of O2, which is chaired by Sir David Arculus, have recommended that its shareholders support the takeover. O2 has brought in City banks JP Morgan Cazenove and Merrill Lynch to advise them on the takeover, while Telefonica is working with Goldman Sachs
This is from The Times (Uk Edt) online..Haven't seen todays papers yet though.
Telefonica and O2 dial up £17.7 billion deal
Spanish mobile phones group Telefonica has launched a £17.7 billion agreed takeover offer for O2, in a move that could spark a bid battle for its much circled British rival.
Shares in O2 surged just under 24 per cent higher on confirmation of Telefonica's offer, rising above the 200p a share it has tabled to stand at 203.5p after nearly an hour's trading.
The huge advance strongly suggests that investors - many of whom are small shareholders - believe a rival bidder may force an auction for the British mobile group.
Telefonica, the world's fifth-largest mobile phones group, said taking over O2 - which has also been linked with potential predators such as Deutsche Telekom of Germany and KPN of the Netherlands - would enable it to enter the German and British telecoms markets, two of Europe's largest.
The Spanish group said it expected the deal, which should be completed by next January, to enhance its earnings immediately and promised O2 shareholders that they would still receive an interim dividend at the beginning of December.
As it launched its 200p a share cash offer, Telefonica said combining the two groups should generate annual savings of just under £200 million a year by 2008.
Bringing the two groups together would create considerable benefits based on economies of scale and would dramatically advance the takeover fever that has been gripping the sector for months.
Shares in Virgin Mobile rose 10 per cent this morning as some in the City predicted that Telefonica's move would spark renewed interest in telecoms providers and equipment resellers.
As it fleshed out its expected savings as a result of a deal, Telefonica added it had "identified but not quantified" further areas where it could cut costs, including in IT, product and software development, advertising and new services.
It made no specific statement about whether it planned to introduce job cuts as a result of a merger.
O2, which was part of BT until it was spun off as an independent listed company in 2001, employs 15,000 people and has nearly 25 million customers in Britain, Ireland and Germany. For the financial year to the end of March, it posted pre-tax profits of nearly £1.8 billion on revenues of nearly £6.7 billion.
The Spanish group's offer represents a premium of 22 per cent to the closing price of O2 shares last Friday. The shares have been driven persistently higher by talk of potential takeover interest in the British group, led by chief executive Peter Erskine.
Mr Erskine said of today's deal: "Since the emergence of O2 as a listed company in 2001, it has enjoyed considerable operational success and, in the process, delivered real value to shareholders. This transaction brings together two companies which are growing strongly with highly complementary geographical activities."
Management of O2, which is chaired by Sir David Arculus, have recommended that its shareholders support the takeover. O2 has brought in City banks JP Morgan Cazenove and Merrill Lynch to advise them on the takeover, while Telefonica is working with Goldman Sachs
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