Telefonica wins support for O2 takeover

SPANISH telecom giant Telefonica yesterday said that a majority of shareholders in mobile phone firm O2 had accepted its €25.7 billion takeover offer.

Telefonica said that O2 investors owning 62.72% of shares had indicated their support for its bid by midday yesterday and that it was extending the closing date for acceptances by eight days to January 20.

An investigation by the European Commission into the legality of the merger was ongoing, but Telefonica said it expected the offer to go wholly unconditional later this month.

The deal will mark the biggest takeover of a British firm since France Telecom shelled out e45bn for Orange in 2000.

It will give Telefonica entry into two of Europe’s biggest markets - Britain and Germany - and could net O2’s chief executive Peter Erskine an estimated €11.6 million.

Slough-based O2 was spun off from BT in 2001, and has around 24.6 million customers in Britain, Ireland and Germany.

In November, it posted a 15% increase in half-year earnings to €1,416m and said turnover rose by 12% to €5.25bn after its customer base jumped by 17% to 25.7 million.

Telefonica has around 173,000 staff and 145 million customers, operating in 17 mainly Spanish and Portuguese speaking countries.