The National Securities Market Commission (CNMV) will “verify” whether or not the Saudi group STC has correctly applied European regulations in its purchase of shares and financial instruments to reach 9.9% of Telefónica’s share capital and thus become the main shareholder of the company, as indicated by sources from the supervisor to Europa Press.

Asked why the purchase of the share package and financial instruments contemplated in the operation – 4.9% in shares and 5% in financial instruments – have gone unnoticed and have not been reflected in the CNMV records, they Sources have indicated that “there are specificities and partial exemptions.”

“Significant holdings and the duty to notify them are included in a European standard and in its Spanish transposition. There are some specificities and partial exemptions for the positions built by financial institutions. The CNMV will verify that the standard has been applied correctly in this case, as it cannot be otherwise,” the CNMV has indicated.

In this sense, different sources have indicated that Morgan Stanley has been acquiring small packages of Telefónica securities for STC in recent months through subsidiaries and other investment vehicles, an issue that, according to various analysts, would also have served to support the price of the company. Telefónica’s quotation, especially in August and after the setback that resulted in the loss of 1

These purchases of securities also explain the increase in the volume traded at Telefónica during the months of July and August, with more than 300 million.

The regulations contemplate that banks have an exemption from the CNMV by which they do not have to register participations in companies if they do not exceed 5% of the company’s share capital and are for trading.

In this context, the CNMV assures that it will “verify” that this acquisition of Telefónica shares complies with the regulations.

The president of Telefónica, José María Álvarez-Pallete, and the company’s CEO, Ángel Vilá, traveled to Saudi Arabia this Wednesday to meet with the top managers of STC, as confirmed by sources familiar with the situation to Europa Press.

The new 2023-2026 strategic plan that Telefonica will present on November 8 at its ‘Investor Day’, as well as the presentation of the main financial figures of the Spanish operator have been at the epicenter of that meeting.

Another of the main issues that they would have foreseenly discussed is linked to the Government’s ‘anti-takeover shield’, by which the Executive has to give permission to non-EU investors who intend to acquire more than 10% of a listed strategic company.

However, this threshold is lowered to 5% in the case of companies with interests in the field of national defense, such as Telefónica.

On the other hand, although STC has indicated that it is still “too premature” to talk about the possibility of requesting a seat on Telefónica’s board of directors, the reconfiguration of the operator’s highest decision-making body is another of the issues that hovers over within the framework of this operation.

However, both companies have highlighted the “friendly” nature of the operation and STC has also stressed that it has no intention of acquiring a controlling stake in the Spanish company.