MADRID (Reuters) - Spain will complete its planned acquisition of a 10% stake in telecoms giant Telefonica (BME:TEF) as soon as possible, but will build up to it so as to not impact the share price, government spokesperson Pilar Alegria said on Tuesday.
Last December, the government decided to enter the company as a counterbalance to the acquisition of a stake in Telefonica by Saudi Arabia's STC. On Monday, state holding company SEPI said it had bought an initial 3% stake.
"It will be done as quickly as possible, in the shortest possible time, provided that it doesn't affect (Telefonica's) share price," Alegria told a news briefing after the weekly cabinet meeting.
Telefonica shares were up around 1% in afternoon trading at 4.03 euros a share, outperforming the broader market in Madrid, up 0.37%. They have gained 13% so far this year.
Alegria added this would give greater shareholder stability to the company and safeguard its strategic capabilities, since Madrid considers Telefonica a defence services provider.
In September, STC announced it had built a 9.9% stake in Telefonica worth 2.1 billion euros ($2.28 billion) in a move to become its top shareholder. Its holding consists of 4.9% of Telefonica's shares and financial instruments that give it another 5% in so-called economic exposure to the company.
Following the government's decision to buy a 10% stake, a source with knowledge of the matter told Reuters the buying would be piecemeal in small quantities over a period of up to two months and should be financed with public debt issuance.
($1 = 0.9213 euros)