andrews15
31st October 2005, 10:13 AM
MOBILE phone group O2, which was spun out of BT Group four years ago, is to be taken over by Spain's Telefonica in a deal worth £17.7bn. Talks which began on Friday were concluded late last night. The move follows months of speculation over the future of O2, Britain's second-largest mobile phone company.
Both KPN of the Netherlands and Germany's Deutsche Telekom have been in the frame to buy the operator, which sponsors ****nal football club and the Millennium Dome.
Either could make rival bids, and the takeover of O2 also raises the distinct possibility of Virgin Mobile, the virtual operator, being next on a European shopping list.
Assuming today's deal goes through, four out the five UK mobile networks will be owned by foreign companies, with Orange part of France Telecom, T-Mobile - the former One2One - owned by Deutsche Telekom, and Hutchison Whampoa owning 3.
Peter Erskine, chief executive of O2, said today: 'This is a good deal for shareholders and a very good deal for customers. It might attract interlopers but we don't really expect that.'
He will make a fortune from the deal and will join the Telefonica board as he continues to run the O2 operation.
Erskine owns 1m shares directly, but also has valuable options which will be triggered by the takeover. He was paid £1.23m last year. He said he had not yet agreed terms with his new employer and could roll his share options over into Telefonica's.
can only be good right?
Both KPN of the Netherlands and Germany's Deutsche Telekom have been in the frame to buy the operator, which sponsors ****nal football club and the Millennium Dome.
Either could make rival bids, and the takeover of O2 also raises the distinct possibility of Virgin Mobile, the virtual operator, being next on a European shopping list.
Assuming today's deal goes through, four out the five UK mobile networks will be owned by foreign companies, with Orange part of France Telecom, T-Mobile - the former One2One - owned by Deutsche Telekom, and Hutchison Whampoa owning 3.
Peter Erskine, chief executive of O2, said today: 'This is a good deal for shareholders and a very good deal for customers. It might attract interlopers but we don't really expect that.'
He will make a fortune from the deal and will join the Telefonica board as he continues to run the O2 operation.
Erskine owns 1m shares directly, but also has valuable options which will be triggered by the takeover. He was paid £1.23m last year. He said he had not yet agreed terms with his new employer and could roll his share options over into Telefonica's.
can only be good right?