Three o2 merger

Ronan Dunne leaves O2 following failed takeover bid from Three

O2 lost its chief executive Ronan Dunne after 15 years at the helm with the company’s future still uncertain after regulators blocked CK Hutchison’s Three £10.5bn takeover bid.

Chief financial officer Mark Evans will be promoted to chief executive from August 1, charged with helping the Telefónica subsidiary consider its options including a potential London initial public offering.

Mr Dunne, who is the longest-serving chief executive in the UK telecoms industry, said in a tweet after the news was announced: “It has been the greatest privilege to serve as o2 CEO – thank you for being amazing.”

He had previously said he would leave o2 once the takeover was complete. He said in a statement the decision to go was “incredibly difficult”.

Mr Evans, who joined o2 in 2012, said he is “hugely excited by the opportunity to lead O2 through its next chapter.”

EU competition regulators stopped CK Hutchison from combining O2 with its Three network in May, citing “strong concerns” about its impact on choice and prices for UK consumers.

The deal would have created the country’s largest mobile group, and the landmark ruling was the first time the European Commission had formally ruled against a telecoms merger in a major European market.

Telefónica has been exploring options for o2’s future since then and said Friday’s announcement followed the “successful completion of a strategic review”.

The group is keen to sell o2 to help reduce its heavy debt burden, which stood at €50.2bn at the end of March.

The Spanish company has spoken with private equity groups interested inbuying the business, and cable group Liberty Global has also said it would consider a bid.

People familiar with the group’s plans said the preferred option would be a London IPO. However, market turmoil and economic uncertainty following the UK’s Brexit vote mean Telefónica is unlikely to rush to float O2.

Telefónica is expected to float its infrastructure division Telxius, which owns cellular masts and a submarine cable network, before any listing of O2.

Earlier media reports suggested Mr Dunne could join up with private equity groups to lead a management buyout, but this will definitely not happen, according to people familiar with his plans. They said Mr Dunne is expected to take a job with a US telecoms company this summer but did not identify the group.

José María Álvarez-Pallete, Telefónica chief executive, thanked Mr Dunne “for his outstanding leadership” and added that he was “delighted” with Mr Evans’ promotion to chief executive.