Scandinavian operator TeliaSonera has given up on attempts to sell Yoigo, its Spanish subsidiary, indicating that offers it has received do not match its own valuation of the business.
“Yoigo [Alcobendas, Spain) has great potential for further development, but as its market strategy does not quite match our other operations, we have been prepared to divest it if we were offered a price which fully reflects its future potential,” said Per-Arne Blomquist, the chief executive of TeliaSonera (Stockholm, Sweden), in a statement.
“As this requirement has not been met, we have discontinued the sales process and look forward to continue developing the company,” he said.
TeliaSonera had been trying to offload its 76% stake in the operator since summer 2012, with the Spanish subsidiaries of Vodafone (Alcobendas, Spain) and Orange (Pozuelo de Alarcon, Spain) cited as possible buyers, along with Latin American telecoms giant America Movil (Mexico City, Mexico), which entered the European telecoms market last year by acquiring stakes in Dutch incumbent KPN (The Hague, Netherlands) and Telekom Austria (Vienna, Austria).
Various analysts had valued Yoigo at about €1 billion ($1.3 billion), more than 13 times what the operator made in earnings before interest, taxation, depreciation and amortization in 2012.
Although Yoigo grew revenues by 12.5%, to SEK8.4 billion ($1.3 billion), between 2011 and 2012, it trails Telefonica (Madrid, Spain), Vodafone and Orange by some distance in the Spanish market, with a 6.4% share of customers at the end of 2012, or about 3.2 million subscribers.
Third-place Orange had a market share of approximately 22% at the end of 2012.
Prospective buyers may be concerned that Yoigo’s run of growth is about to end, with Spain’s economy in the doldrums and both Telefonica and Vodafone reporting substantial year-on-year declines in revenues for the fourth quarter of 2012.