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LONDON (Alliance News) - Hong Kong-based conglomerate Hutchison Whampoa Ltd on Friday said it has entered into exclusive negotiations with Spanish telecoms group Telefonica SA regarding the potential acquisition of O2 UK for an indicative price of GBP9.25 billion in cash.
Hutchison, which already owns Three UK, the smallest of the UK's mobile operators, said the GBP9.25 billion purchase price would be paid at completion, with a further GBP1 billion due based on the cumulative cash flow of the combined Three-O2 businesses. The timing and amount of this further payment would depend on the cash flow of the businesses, Hutchison said.
O2 has been the subject of takeover speculation for months. BT Group PLC was understood to have entered talks with both O2 and EE Ltd, the UK mobile operator owned by Deutsche Telecom AG and Orange SA, before eventually deciding to proceed with the acquisition of EE.
That deal has sparked a wave of speculation about potential consolidation in the UK mobile market, with Sky PLC and TalkTalk Telecom Group PLC also understood to have considered making a joint bid for O2, and Vodafone Group PLC having been cited as a potential buyer of Sky.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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