Auna seeks higher bid from funds

Grupo Auna, Spain's third largest telecoms group, would reject an ?11bn ($14.5bn) takeover bid if the offer included the group's ?4.5bn debt, Luis Alberto Salazar-Simpson, Auna's chairman, said on Thursday.

A consortium of five global buy-out groups, including Blackstone, Carlyle and Providence of the US and Apax Partners and CVC Capital of theUK, are understood to be studying an ?11bn bid for Auna.

The proposed bid would be one of the world's biggest private equity acquisitions. New York's Blackstone manages the world's biggest buyout fund a $6.45bn pool.

The venture capital partners and Auna executives met in Madrid last week, although Mr Salazar-Simpson said Auna had not yet received a formal offer.

Speaking on the sidelines of an economic conference, Mr Salazar-Simpson said Auna's main shareholders would not accept an offer of ?11bn.

Some of Auna's share-holders have valued the group at more than ?14bn.

Nevertheless, there are reports of dissent among Auna's partners.

Endesa, Spain's biggest electricity company and Auna's largest shareholder with 32.6 per cent, is understood to be keen to realise capital gains from its Auna investment in order to reduce its own debt burden.

Union Fenosa, another utility, with an 18.6 per cent stake in Auna, will do whatever Santander Central Hispano, Spain's largest bank, tells it to do.

Santander is the largest shareholder in Auna with a 27 per cent stake. The bank is also the main shareholder in Union Fenosa.

The three shareholders were partners in Airtel, Spain's number two mobile operator, which was sold to Vodaphone of the UK at the height of the telecoms boom four years ago.

The three shareholders pocketed the largest capital gains ever recorded in Spanish corporate history and are clearly hoping to make a similar killing with Auna.

Before the approach of venture capital groups, Auna had been mulling a public listing next year.

The telecoms group has 9m mobile clients and 1.6m fixed-line clients, making it the main domestic competitor of Telef?nica, the former telecoms monopoly.