Telefonica hires Hudson Sandler for O2 bid battle

Spanish telecoms company Telefonica this week drafted in Hudson Sandler for its agreed £17.7bn bid for mobile firm O2.

Hudson Sandler CEO Andrew Hayes began working on the comms push around Telefonica's quickly agreed all-cash offer on
Sunday. The deal was announced the next day following media speculation about a Telefonica bid.

Hudson Sandler's appointment underlines the likelihood that Telefonica's agreed offer, which was at a 22 per cent premium to O2's closing price last Friday (28 October), will flush out other bidders and kick off a takeover battle.

Deutsche Telekom, which abandoned talks with Dutch rival KPN for a joint bid for O2, has already been tipped as a likely candidate to join the fray. It could make a cash and share counter-offer for O2, Europe's sixth-largest mobile phone company and one of only a handful of independent operators.

The apparent speed with which the deal has been agreed is symptomatic of the acquisitive culture of the telecoms sector, which is now ripe for consolidation.

Companies whose third-generation mobile investment had left them too debt-laden to consider takeovers are now in a much better position to buy up competitors.

If successful, Telefonica's acquisition of O2 is likely to herald a major shake-up of PR across the group.

O2 group head of media relations Simon Gordon said it was too early to say what would happen to the company's three-strong group comms division, which includes Gordon and director of communications David Nicholas.

In particular, the Telefonica deal calls into question the position of O2's most senior PRO, widely respected director of corporate affairs Richard Poston.

His duties are likely to be absorbed along with other group-level communications functions.

Gordon said any redundancies would be voluntary but it was 'very unlikely' that O2's ten-strong UK PR team under head of comms Glenn Manoff would be cut.

'Our operating businesses in the UK, Germany and Ireland will stay as they are,' Gordon said.

O2 has retained The Maitland Consultancy since its demerger from BT in 2001.

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