The shares of the British firm Zegona, owner of Vodafone Spain, were down about 6% on the London Stock Exchange around 10:50 a.m. this Thursday, after announcing that it will distribute 400 million euros among its shareholders through dividends and a share buyback plan.
Specifically, the fund was losing 5.76% on the market, with its shares trading at 16.68 British pounds (19.4 euros) per share.
Zegona has announced before the opening its new capital allocation framework and has detailed a total remuneration of 400 million euros for shareholders, which is divided into an ordinary dividend of 200 million euros and an additional share buyback program for another 200 million euros.
According to the company, this scheme defines a "clear and lasting" structure for investment in the business, balance sheet priorities, and shareholder remuneration policy.
The fund has emphasized that this decision comes after completing the first phase of the transformation of Vodafone Spain, reducing leverage and lowering the cost of debt since the acquisition, and reflects the board's confidence in the growth of free cash flow "from this moment on."
Regarding the first remuneration under this new framework, the board plans to propose an ordinary dividend of 200 million euros corresponding to the fiscal year ending on March 31. This payment will be financed with free cash flow, will be subject to approval by shareholders at the annual general meeting, and will be paid as a final dividend.
In parallel, the entity has launched a new share buyback program for an amount of 200 million euros, also funded with free cash flow.
This plan, according to the fund, adds to the 200 million euro buyback program announced on November 27, 2025, and initiated on December 12, 2025, which the company now considers completed.
The acquisitions of shares in the market will be executed under the agreement signed with Canaccord Genuity Limited on September 23, 2026, and all repurchased shares will subsequently be canceled.
From the board of directors, they believe that, at current prices, the buyback represents an "attractive" use of capital, estimating that the shares continue to trade at a "substantial discount" to their intrinsic value and that of other European telecommunications groups.
Investment in Vodafone Spain and debt objectives
The operator has reiterated that the investment in Vodafone Spain to bolster future revenue and cash flow continues to be its "top priority."
The firm will maintain its investment effort in customers, product development, network quality, and improvement of operational efficiency.
According to analyst consensus, Zegona plans to allocate between 2,000 and 3,000 million euros to investments in Vodafone Spain over the next 3 or 4 years. These funds will allow for further strengthening of the network, accelerating innovation, enhancing customer experience, and consolidating the competitiveness of the business, while reflecting Zegona's long-term commitment to Vodafone Spain and the Spanish market.
Furthermore, Zegona has highlighted that the closure of the joint ventures of fiber PremiumFiber and FiberPass has "fundamentally" changed the economics of Vodafone Spain's fixed line, resulting in a "simpler business with greater cash generation capacity."
As a consequence, it expects that Vodafone Spain can finance its growth plan on its own from the cash flow it generates each year.
On the financial front, the company aims to maintain its debt within a sustainable long-term range, setting a target of between 2.25 and 2.75 times its earnings before interest, taxes, depreciation, and amortization after leases (EBITDAaL).
After the capital returns to shareholders, the debt will be positioned at the lower end of that range. The company has significantly reduced its leverage: from 3.1 times EBITDAaL when it acquired Vodafone Spain in May 2024 to 2.3 times as of June 30, 2026.
Additionally, in June 2026, Zegona refinanced all of its secured notes and senior credit facilities, extending the maturity of its capital structure beyond five years and reducing the annual recurring cost of debt to about 170 million euros, compared to 294 million euros two years ago.
"An important step" in Zegona's evolution
Looking at the medium and long term, the board will maintain "full flexibility" over the form, combination, and timing of future capital returns beyond the progressive ordinary dividend, actively analyzing new share buybacks and extraordinary dividends with the aim of returning "all free cash flow to shareholders over time."
The president and CEO of Zegona, Eamonn O'Hare, has pointed out that the announcement represents an "important" step in the evolution of the company.
"Since the acquisition of Vodafone Spain two years ago, we have built a stronger, simpler business with greater cash generation capacity, and we are now in a position to establish a clear and disciplined framework for capital allocation," he emphasized.
O'Hare added that his goal is to return all free cash flow to shareholders in the "fastest and most efficient" way possible to maximize long-term value, stressing that, based on the 1.6 billion euros of remuneration executed at the beginning of the year, "the announcement returns approximately an additional 10% of Zegona's market capitalization."