Spain’s economic ministry set the wheels in motion for the country to buy a stake of up to 10 per cent in Telefonica, a move which will see the nation’s investment fund likely vie with stc to be the operator’s largest shareholder.

Spain plans to buy its stake through state-owned holding company Sociedad Estatal de Participaciones Industriales (SEPI).

In a social media post the country’s ministry of economy, commerce and business indicated the plan was in-line with strategies undertaken by authorities in other European countries including Germany and France.   

It added its presence as a shareholder would give “stability to the company and the development of its plans in our country.”

In a brief stock market statement Telefonica acknowledged the upcoming purchase, noting it was focused on its recently approved strategic plan and aimed to “continue creating value for its shareholders and providing the best-in-class service for its clients.”   

The announcement comes three months after stc splashed €2.1 billion on its stake, which is made-up of a 4.9 per cent direct holding and 5 per cent through so-called financial instruments.

Following the buy by the Saudi Arabia-based player Spain reportedly vowed to look into the potential implications, with allowing the company to upgrade to a 9.9 per cent direct holding subject to approval.

Financial data website Marketscreener lists stc as Telefonica’s largest shareholder with 4.9 per cent equity followed closely by banks BBVA and CaixaBank.