TeliaSonera confirmed it is in exclusive talks with UK-based venture capital firm Zegona over a possible takeover of its Spanish mobile unit Yoigo.
The move follows months of speculation about the future of Spain's fourth-largest mobile operator after TeliaSonera indicated it was continuing to review its presence in the Spanish market. The company currently controls 76.6 per cent of Yoigo.
In February, reports said Sweden-based TeliaSonera had commissioned Deutsche Bank to launch the process for a potential sale of the unit, with Zegona and Spanish operator Másmovil Ibercom cited as the main candidates.
Previous reports have suggested that bids were expected to be in the range of €500 million ($562 million) to €600 million. Quoting unnamed sources, Reuters said Zegona had made the highest offer to buy Yoigo.
Másmovil has previously been seen as the more likely contender since a merger of the two companies would create a new fixed-mobile player on the market: the MVNO acquired some of Jazztel's assets when the fixed operator was bought by Orange Spain.
However, Zegona -- which was established by two former Virgin Media executives to execute a 'buy-fix-sell' strategy in the European technology, media and telecommunications (TMT) sector -- also now owns fixed assets in Spain after buying cable operator Telecable there last year.
In 2014 TeliaSonera noted that its Spanish business remained sub-scale with a market share of around 7 per cent. Yoigo has struggled to make headway on the market despite an aggressive, low-cost approach.
The operator in January withdrew from the quadruple-play market more than two years after launching bundles of fixed and mobile services, making it the only one of the four mobile network operators that does not provide a multi-service plan.
Yoigo is now placing its bets on the mobile-only market, and recently reinstated a popular 20 GB smartphone tariff. This means the company once again offers the largest mobile data allowance on the market.
In December last year, the company also said it would invest €25 million in the expansion of its 4G mobile network with the goal of covering 80 per cent of the Spanish population in May 2016.
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