THE parent company of mobile network O2 has ruled out the possibility of floating the company in the UK.
Spanish telecoms giant Telefonica, which recently took its O2 Germany unit public, has been tipped to launch a UK initial public offering (IPO) in order to pay down its €56bn (£46.5bn) of debt. However, the firm’s chief operating officer, José María Álvarez-Pallete, shot down the idea yesterday.
“We feel no need to IPO the UK business,” Álvarez-Pallete said. “We do not need to IPO any business, our financial situation is pretty solid.”
Telefonica Deutschland went public last October in a €1.5bn offering, the biggest in Europe in more than a year, with the placing five times oversubscribed. However, Álvarez-Pallete said the German and British businesses were very different. “We had invested a lot of money in the [German] business in the past five years but that was not recognised…it was a question of crystalising the value,” he said. “I don’t think the UK business is undervalued.”
Telefonica took O2 private in a deal valued at £17.7bn in 2005.