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Last Updated: Wednesday, 2 November 2005, 11:34 GMT
Deutsche Telekom rules out O2 bid
O2 launch
O2 is Europe's sixth largest mobile phone group
German phone giant Deutsche Telekom has ruled out making any counter-bid to the 17.7bn ($31.2bn) offer by Telefonica for UK mobile carrier O2.

Since Telefonica, Spain's biggest telecoms group, made its bid on Monday, 02 share have shot up more than 25%.

Investors had hoped for rival offers, especially after Telekom and Dutch group KPN held abortive talks with 02.

O2's shares now trade above their offer price and Telekom says a bid would "not be in the interests of shareholders".

Shares in Telekom, which already owns the T-Mobile carrier in the UK, went up 2.6% in response to the news.

With both KPN and Telekom out of the running, Telefonica now looks very likely to succeed. Its bid has already been backed by O2's board.

If the tie-up goes ahead and regulators approve, the resulting firm would have 116 million mobile phone users and a 16 percent market share of revenue in Europe's five biggest mobile phone markets.

Telefonica is strong in Latin America, but has not had any presence in the UK and Germany, where O2 has a solid market share.

What the takeover will mean for O2 customers

Telefonica bids 18bn for UK's O2
31 Oct 05 |  Business
Q&A: O2's 18bn Spanish takeover
31 Oct 05 |  Business
O2 ups forecast for Germany, UK
27 Sep 05 |  Business
Telekom and KPN end O2 bid talks
16 Aug 05 |  Business
Telefonica bets on Latin America
08 Mar 04 |  Business
Deadline looms for MMO2 investors
09 Mar 05 |  Business

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