Zegona has said that it is in talks with Vodafone about a potential acquisition of Vodafone Spain.

Spanish newspaper Expansion, which has cited sources close to the deal, said that British telecom firm, Zegona, was seeking financing for a bid for all or 50% of the Vodafone’s Spanish business, noting that it would be easier for Zegona to gain financing for the latter.

The bid could value more than €5bn (£4.3bn), the newspaper has said.

Zegona was founded by Virgin Media executives Eamonn O’Hare and Robert Samuelson to invest in European telecoms. It went on to purchase northern Spanish cable company Telecable in 2016.

It then sold the company to rival Euskatel in 2017, taking a stake in the enlarged group, which went on to be sold to MasMovil in 2021 for nearly €2bn.

Vodafone is in the three largest telecom operators in Spain, along with Telefonica and the local unit of France’s Orange, which is currently in the process of merging with MasMovil, the country’s fourth largest operator.

The group’s revenue jumped in the last quarter following price rises, although this came at the cost of losing some customers. Its total revenues fell by 4.8% to €10.7bn to the end of June, although on a comparable basis, sale increased by 3.7%.

In the last quarterly earnings call, Vodafone’s chief executive officer Margharita Della Valle said that “structural change” was very much necessary in Spain in the context of market conditions.

She added that the company was “considering a range of options” but it was too early to comment on them.

Should the deal go ahead, Zegona would have to take the form of a reverse takeover, meaning that it would need to apply for readmission of its shares on the London Stock Exchange.

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