MADRID (Reuters) - Mobile telephone operator Vodafone (L:VOD) has started talks to buy Spanish rival MasMovil (MC:MASM) with the three buyout funds who recently took it over, El Economista newspaper reported on Friday, citing sources with knowledge of the situation.
The deal could value MasMovil at 6 billion euros (5.5 billion pounds), including debt, El Economista said.
Vodafone declined to comment. MasMovil officials were not immediately available for comment.
Private equity funds KKR (N:KKR), Cinven and Providence recently bought most shares in MasMovil in a public tender offer that valued the company at 3 billion euros and are planning to squeeze out the remaining minority holders and delist the company in the coming weeks.
A number of analysts who follow Vodafone were sceptical about the prospects of such a deal.
"We are highly doubtful," Jefferies said in a note. "We repeat our view that the opposite - Vodafone selling its Spanish business to a de-listed MasMovil - is much more plausible."
A report in October 2019 saying MasMovil was in talks to buy Vodafone's Spanish operation was denied by both companies.
El Economista reported in June that France's Orange (PA:ORAN), another major operator in Spain, was discussing a counter bid for MasMovil in response to the private equity offer. Orange dismissed the report.
European telecoms operators have struggled to boost profit growth in a crowded market and possible consolidation in Spain could be followed by similar moves in other countries.