Telefonica wins majority share support for O2 takeover

Spanish telecoms giant Telefonica today said that a majority of shareholders in UK mobile phone firm O2 had accepted its £17.7bn (€25.7bn) takeover offer.

Telefonica said that O2 investors owning 62.72% of shares has indicated their support for its bid by midday yesterday and 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 conditional later this month.

The deal will mark the biggest takeover of a UK firm since France Telecom shelled out £31bn (€45bn) for Orange in 2000.

It will give Telefonica entry into two of Europe’s biggest markets – the UK and Germany and could net O2’s chief executive Peter Erskine an estimated £8m (€11.6m).

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

In November, it posted a 15% increase in half-year earnings to £975m (€1.4bn) and said turnover rose by 12% to £3.61bn (€5.2bn) 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.