Citi Research has raised its stance on Telefónica to “buy” from “neutral” and its target price to $17.39 per share from $14.59, according to Reuters news.
Separately, the global news agency reported that analysts are viewing Telefónica’s move to raise prices in Spain as “a bold bet that could finally draw a line under a six-year slump, cut the firm’s reliance on Latin America and give it a leg up over rivals on the lucrative premium telecoms market.”
Telefónica will raise prices in Spain by between 5% and 15%, effective May 5. This should add up to $326 million to core profits.
The telecom giant has seen its revenue fall 13% worldwide and 42% in Spain since 2008.
In an effort to improve its performance, Telefónica has focused on fewer markets, cut debt and invested in new high-speed networks. While these measures may have had success in many of its markets, the moves didn’t go over as well in Telefónica’s home country.
Meanwhile, Telefónica Brasil on April 28 announced the pricing of the previously announced global offering of 236,803,588 preferred shares, including 29,591,758 preferred shares in the form of American Depositary Shares, each of which represents one preferred share of Telefónica Brasil.
The preferred shares were offered at a price of $16.08 per preferred share or per ADS. Telefónica Brasil has granted the international and Brazilian underwriters the option, exercisable until May 7, to purchase up to 6,282,660 additional preferred shares at the public offering price.
The global offering is expected to close on or about May 4, subject to customary closing conditions.
Telefónica Brasil estimates that the net proceeds of the global offering will be about $5.376 billion, after deducting underwriting discounts and commissions and estimated offering expenses payable by the company.
Telefónica Brasil intends to use the net proceeds from the global offering to fund the cash portion of the GVT acquisition – expected to close by mid-2015 – repay GVT’s loans with a related party and adjust its capital structure in order to maintain liquidity.
