Spanish telecoms giant Telefonica has denied reports it was forced to turn down a multibillion Euro takeover offer from American telco AT&T.
According to a report in Spanish daily El Mundo, AT&T launched a €70bn bid to acquire Telefonica, but the Spanish government stepped in to stop the deal from happening. Sources cited by El Mundo claimed government officials said Telefonica is too important to Spain and to the Spanish economy to allow it to fall into foreign hands.
However in a statement given to media, Telefonica said the reports were untrue, and that no takeover offer had even been received, let alone turned down at the request of the government. "Telefonica has not received any approach or spoken or written indication of interest," the statement read.
AT&T declined to comment "on rumour and speculation in the marketplace".
The deal, which included AT&T taking on Telefonica's €52bn of debt, would have created the world's largest telecoms company with a market cap of nearly €300bn. It would also have given AT&T a much stronger presence throughout Latin and South America - around half of Telefonica's revenue now comes from the region.
While its operations outside Spain are booming, Telefonica is not doing so well in its home market. Its Movistar brand, which offers mobile and broadband services, lost 700,000 mobile subscribers during the first quarter of 2013 and saw year on year revenue drop 16.4 percent during the same period. In a country with 27 percent unemployment many users are switching to low-cost alternatives such as Yoigo and Pepephone.