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Criteria raises its investment in Telefónica to 750 million and lowers its cost of entry

Date: June 17, 2024 Time: 03:57:39

Criteria Caixa adds and continues in Telefónica with a new wave of small purchases of shares on the stock market in the days before and after the operator’s dividend collection on Thursday, June 15. The holding company has received close to 20 million euros after the payment of 0.15 euros per share in this first shareholder remuneration window that will be completed at the end of the year with another identical one.

After an investment of 8.7 million euros in May, Criteria accumulated purchases of Telefónica shares worth 7.2 million until June 16, according to CNMV records. It has been done in this first fortnight with close to 2 million shares that raise its total stake in the company above 2.35% of the capital, that is, some 135 million titles.

The investment arm of La Caixa, chaired by the also vice president of Telefónica, Isidre Fainé, is still managing losses from this investment but continues to lower the acquisition cost with each purchase it makes and by collecting dividends since it is a shareholder of the owner of Movistar and O2.

Global investment in Telefónica has exceeded 750 million euros since 2017, according to data from the annual reports consulted by ‘La Información’. With this gross investment volume, the acquisition cost is around 5.5 euros, 50% above its real price of 3.65 euros. At this price, its 2.35% stake is valued at 494 million euros.

The latent gross capital losses would be around 250 million. However, in these seven years, Criteria has pocketed a significant flow of cash dividends that helps it reduce the theoretical cost of its investment to less than 4.5 euros per share, according to estimates from the financial sector, increasingly close of Telefónica’s share price and, therefore, of a situation in capital gains.

Taking as a reference the recent collection of 20 million euros and the other 20 that would correspond to it in the second payment in November, Criteria will have received 145 million in dividends since 2017, a figure that could have been higher if it had always opted for this formula, but in previous years it also received shares when Telefónica displayed its ‘scrip dividend’.

CriteriaCaixa began to build this stake seven years ago as part of its portfolio diversification exercise to balance its extensive presence in the financial and energy sectors, where it maintains most of its assets of 24,000 million euros with Caixabank and Naturgy to the head. Indirectly, the holding company already had interests in Telefónica through the historical participation of the bank, heir to its savings bank.

According to Criteria’s reports, the holding company bought its first package of shares above 8 euros in 2017 to take over 0.13% of Telefónica. The following year, above 7 euros on the stock market, it made its largest investment to date after allocating 408 million euros to acquire another 1.02% of the capital. From then on, and after the operator fell on the stock market, it moderated its purchase. Only 28 million euros in 2019, 8 million in 2020 and barely 29 million in 2021.

In 2022, Criteria reactivated its operations with an accumulated investment of 190 million euros, according to information from the entity, which raised its stake at the end of the year to 2.17% of the capital. In 2023, it has so far taken another 0.18% and exceeds Telefónica’s 2.35%, which makes it the fourth largest shareholder of the teleco behind BBVA, Blackrock and Caixabank.

As reported by this newspaper last month, Criteria has given the ‘sorpasso’ to the aggregate position of Vanguard Group, the American index fund manager, according to the data recorded at the end of April by Morningstar. The holding company came to occupy fourth place in the Telefónica shareholder ranking, only surpassed by BBVA (4.88%) and the American manager Blackrock (4.86%).

In third place is its investee Caixabank (3.5%), a bank that is also controlled by the State through the FROB and by Criteria Caixa with just over 30% of the shares. Its percentage in Telefónica has been declining in recent years and it is now only a little more than one point above the holding company. In September 2022, the entity chaired by José Ignacio Goirigolzarri sold 1% of the operator’s capital through a new operation with financial derivatives.

The increase in Criteria’s participation in 2023 has also had to do with the effect of the capital reduction that the operator carried out one month. Telefónica redeemed and removed from circulation 24.8 million shares, equivalent to 0.43% of ownership and valued at around 100 million euros at current prices. Now its total number of shares is 5.750 million.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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