London-listed buy-fix-sell vehicle Zegona Communications (LSE:ZEG) has confirmed that it is in talks with Vodafone Group PLC (LSE:VOD) to take over the British telecoms group’s flailing Spanish arm.
"(Zegona) confirms that it is in discussions with Vodafone Group in connection with the potential acquisition, and with banks in relation to its financing," a statement published by Reuters said.
Sources told the Spanish paper Expansion that Zegona is seeking out funding for either a total takeover, or 50% acquisition, of Vodafone Spain at a €5 billion (£4.3 million) valuation.
Vodafone is a top-three telecoms operator in Spain, alongside domestic player Telefónica and French firm Orange.
But in June, the group appointed Morgan Stanley to weigh up its divestment options following ongoing shareholder pressure to streamline operations after years of poor performance.
Comprising around 9% of global operations, Spain was Vodafone’s worst-performing segment in the 2023 financial year, with organic service revenue growth falling by 5.4%.
London-listed Zegona is well known for its buy-fix-sell approach to the European telecoms sector.
In 2021, the firm returned £329.3 million to its shareholders after the company sold its investment in Spain’s Euskaltel to Masmovil.
In fact, Zegona was founded by former Virgin Media executives Eamonn O’Hare and Robert Samuelson, who floated the vehicle on AIM in 2015.
In 2017, the firm sold its stake in Spanish cable company Telecable to Euskatel after taking it over two years prior.