O2 could offer customers shares as part of IPO

Reports claim operator could launch £10bn float by the end of the year

O2 customers could be offered the chance to own a share in the company as part of a stock market floatation by the end of the year, despite uncertainty caused by the EU referendum result.

Parent-company Telefonica has been looking at options to sell off O2 in order to pay down some of its debts, and reports in the Telegraph claim executives are considering a customer share through loyalty scheme Priority.

O2 has previously admitted it was considering all options after the European Commission rejected Three-owner CK Hutchison’s £10.25 billion takeover bid in May. Options being considered are believed to include an IPO, a management buyout by CEO Ronan Dunne, and interest from private equity firms.

Citing sources close to the operator, the reports claim Telefonica believes a flotation will be the best option to secure a valuation close to the £10.25 billion that Hutch had offered for its British arm.

Executives are understood to be looking at selling of a minority stake in O2, the reports claim, allowing Telefonica to maintain a controlling interest in the business.

“The work going on now is less about ways of selling the business and more exploring the strategic ways to build value in it,” said a source familiar with current discussions told the national newspaper.

“Telefonica does not feel there is any short-term need to do anything.

“Selling shares to customers could be a good way of getting them to buy into the O2 brand even more.”

Telefonica has refused to rule out an IPO, with a spokesperson for O2 saying it is currently considering a number of options.

“We continue to explore a number of options including an IPO which is being given serious consideration,” a spokesperson for O2 said.

“A choice will be made when market conditions are deemed appropriate.”