LONDON - The Spanish telecommunications giant Telefónica denied a report on Monday that it was the target of a $93 billion takeover approach by AT&T.
The statement follows a report by the Spanish newspaper El Mundo that the American company had been thwarted in a potential bid for Telefónica after Spanish politicians blocked the deal last week for national strategic reasons.
AT&T’s prospective 70 billion euro deal also would have included the assumption of Telefónica’s more than 50 billion euro debt burden, according to El Mundo. The takeover would have represented the largest European deal so far this year, as local companies continue to shy away from large acquisitions.
In Madrid, shares of Telefónica rose as much as 3.9 percent before paring back gains. They were up 2.6 percent in late morning trading on Monday.
Since the financial crisis began, the Spanish telecommunications company has fallen victim to the increasingly difficult economic environment, and has been looking to offload and spin-off assets in a bid to reduce its debt levels.
Despite Europe’s gloomy outlook, the phone, wireless and cable sectors has been one of the few bright spots in the Continent’s moribund acquisitions markets, as several American players, including John Malone’s Liberty Global, continue to hunt for assets.
In a brief statement, Telefónica said that it had not been approached by AT&T.
“In relation to press rumors published today, Telefónica states that it has not received any approach, nor any indication of interest, neither verbal nor in written form, from any party,†the Spanish company said in a statement.
A representative for AT&T could not be immediately reached for comment.
As part of efforts to reduce its debt, Telefónica spun off its German subsidiary, Telefónica Deutschland, raising $1.9 billion last year in Europe’s largest initial public offering last year.
The Spanish company also sold its $1.4 billion stake in China Unicom back to the Chinese firm, while it continues to mull potential I.P.O.’s for its Latin American divisions.
Europe’s telecommunications sector has been influx for the last 18 months, as a number of international companies circle local assets.
The Mexican billionaire Carlos Slim has acquired companies like the Dutch cellphone operator KPN and its Austrian counterpart Telekom Austria. Mr. Malone’s Liberty Global also recently completed its $16 billion takeover of the British cable company Virgin Media. Rumors also abounded that Verizon is planning a $100 billion approach to buy the 45 percent stake it does not already own in Verizon Wireless from its British partner, Vodafone.
