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Investors eye Spanish telco Masmovil
Several large institutional investors are circling round Masmovil, eyeing up the possibility of taking a stake in the telecommunications provider which has become one of Spain's growth stories.
Current shareholders include the country's largest bank Santander, which recently increased its stake to 2.43 percent. The company's international investors include UBS Gestion.
So why is Masmovil attracting so much investor attention? Here are the two key reasons:
• It has big expansion plans, aiming to become Spain's fourth biggest integrated telecoms operator.
• It plans to transfer to the Continous Market from the alternative stock market MAB, where the company has seen its stock price rise by 97 percent so far this year.
Masmovil's jump to the Continuous Market will take place once its 2015 results have been released, and the company could consider options such as bank credit or debt issues to provide financial backing for the move.
BUY OF JAZZTEL FIBRE-OPTIC ASSETS WILL BOOST BUSINESS
Like many of its European peers, Spain's telecommunications sector is now rebuilding as the economy consolidates its recovery and consumption picks up.
But consumers have become more demanding and the industry's focus has shifted towards providing integrated fixed, mobile voice and data services.
The popularity of telecoms giant Telefonica's heavily discounted fixed-mobile bundle called "Fusion" launched in 2012 meant that its rivals needed to find similar ways to compete.
With that aim in view, Masmovil, a mobile virtual network operator (MVNO), merged last year with business-focused telco Ibercom.
During the first half of 2015, the company quintupled its revenues to 59 million euros, while EBITDA rose 127% to 2.8 million euros.
Masmovil's strong results have been largely driven by its relentless policy of acquisitions in 2014, with the incorporation of companies like Neo, as a result of which it obtained a 4G licence, and Xtra Telecom.
But its latest purchase of fibre-optic assets from Spanish broadband provider Jazztel – bought out last year by Orange – will catapult Masmovil into the big telcos league.
So it's not surprising investors want to get a piece of Masmovil's pie.
FOCUS ON STRENGTHENING INVESTOR RELATIONS
Masmovil has seen its stock price rise by 97 percent so far this year. In August, the company revealed that three important institutional investors had acquired 1.2 percent of its capital.
It has recently strengthened its Investor Relations area ahead of its leap to the Continuous Market by hiring Javier Marin, formerly Investor Relations head at Spanish technology group Indra.
Masmovil will now embark on a major marketing initiative with companies and private individuals, leveraging on the Jazztel assets. It will have access via fibre optic to 720,000 households in Madrid, Barcelona, Valencia, Seville and Malaga, as well as to over 18 million homes via ADSL.
For information on investment and legal services in Spain, please contact corporate law firm Argali Abogados.