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Telefonica to sell Sogecable stake

16.8% share sold to Spain's Prisa

By EMILIANO DE PABLOS, JOHN HOPEWELL

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Leaving analysts at a loss for explanations, telco giant Telefonica told Spain’s stock market regulator Friday that it will sell its 16.8% stake in dominant pay TV operator Sogecable to Prisa, the country’s biggest media company, in a $1 billion deal.

Prisa offered e27.98 ($44.40) per share for Sogecable in December, a bid it was obliged by law to make after its own stake in the unit topped 50%.

Shareholders had until Friday to respond to the offer and the market had widely assumed that Telefonica would hold on to its stake.

Telefonica prexy Cesar Alierta even said in February that Telefonica was “very happy” with its share in Sogecable.

Now that has changed and the market is left casting around for explanations.

“Telefonica doesn’t really need the cash. Maybe it doesn’t want to become a near sole minority shareholder with little control over Sogecable,” said an analyst.

Prisa estimates that around 95% of shareholders have accepted its bid.

If it gets absolute control, the speculation is that Prisa will sell off digital satellite pay TV operator Digital Plus and keep broadcast network Cuatro.

Prisa’s shares closed down 1.8% at $17.65.