Telefonica plans to sell its 16.8% stake in dominant pay TV operator Sogecable to Prisa, the country's biggest media company, in a €635 million (US$1 billion deal), a Daily Variety report said.
Prisa offered €27.98 (US$44.40) per share for Sogecable in December, a bid it was obliged by law to make after its own stake in the unit topped 50%, the report added.
Shareholders had until this week to respond to the offer and the market had widely assumed that Telefonica would hold on to its stake.
Telefonica prexy Cesar Alierta even said in February that Telefonica was 'very happy' with its share in Sogecable.
Now that has changed and the market is left casting around for explanations.
Prisa estimates that around 95% of shareholders have accepted its bid.
If it gets absolute control, the speculation is that Prisa will sell off digital satellite pay TV operator Digital Plus and keep broadcast network Cuatro.