The Spanish opco is valued at €4 billion, despite its struggles and losing out on MásMóvil merger to Orange Spain
Days ago, Vodafone Group’s CEO, Margherita Della Valle, saying that its Spanish operations needed “structural change” and that Vodafone is considering “a range of options”. Vodafone is the third-largest operator in Spain.
Private equity interest
Now Bloomberg reports a group of private equity firms – Warburg Pincus, Carlyle Group and Apollo Global Management – could be interested in bidding for the Spanish opco, according to Bloomberg. Despite its travails, Vodafone’s Spanish unit is valued at around €4 billion.
In April, Bloomberg reported Vodafone Spain was ‘trailing a coat’, that is looking to attract buyers, although no formal sales process was in place. It reported that Apollo Global management was potentially interested.
Della Valle made the comments about the Spanish opco earlier this week at its Q1 earnings report. While the decline in the service revenues in Spain fell 3.0% to €965 million, down from a decline of 3.7% in the previous quarter, this appears in part to be down to price increases as it lost both mobile and fixed customers.
Della Valle said a strategic review of Spain, begun in May, had borne some fruit but clearly not enough in her view.
History of struggle
Vodafone has been struggling in the Spanish market for a considerable time. It had explored a merger with MásMóvil, the country’s fourth-largest telco which is backed by private equity.
After months of speculation, Orange Spain suddenly announced it would be the senior partner in a merger with MásMóvil. The proposed deal is undergoing scrutiny by the European Commission which is concerned that the tie-up with Orange might be anti-competitive. Orange is the country’s second-largest operator behind leader Telefónica.
There is speculation that should the European Commission block Orange’s deal with MásMóvil, a tie-up with Vodafone could be back in the frame. But mills of the Commission grind slowly and it seems Vodafone is looking for a speedier solution to its Spanish situation.
In the meantime, Spain is the third country in Vodafone’s planned pan-European roll out of MEC via AWS Wavelength.