Telefonica to axe O2 sale plans following EU referendum result

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Reports claim the Spanish operator has ditched plans to offload its UK arm after UK voted to leave the European Union

Telefonica has ditched plans to sell O2 following the result of the UK referendum on its membership of the European Union.

On June 24, 51.9 per cent of British voters chose for the UK to leave the EU as part of a landmark referendum, but reports from Bloomberg claim this has caused Telefonica to shelve plans to divest its share in O2.

The Spanish operator has admitted it was looking at options to offload its UK arm in a bid to cut its £40 billion worth of debt, with the European Commission last month rejecting a £10.25 billion takeover bid from Three-owner CK Hutchison.

Ronan Dunne - CEO O2 (1)Citing sources familiar with the matter, Bloomberg claims uncertainty caused by the vote to leave the EU has led Telefonica’s top brass to rethink its sales plans. These included a potential IPO (Initial Public Offering) or a management buyout, led by CEO Ronan Dunne.

Brexit has also caused rival Vodafone to rethink its strategy, with the Group considering relocating their Paddington, London offices in the face of the vote.

A spokesperson for O2 confirmed that the operator has now been brought back in to the Telefonica Group. Following the agreement with CK Hutchison, O2 had posted its financial results separately to Telefonica, but it it will now be integrated into the Spanish operators postings.

The spokesperson said: “We continue to explore a number of options including an IPO which is being given serious consideration. A choice will be made when market conditions are deemed appropriate.

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