Shares in Telefónica, the euro zone’s largest telecoms group by market value, rose yesterday morning after the company was forced to deny reports in the Spanish media that Madrid had knocked back a takeover approach from AT&T, the US telecoms operator.

Spain's industry minister José Manuel Soria said yesterday said he had no knowledge of any approach for Telefónica from AT&T, but acknowledged that he had met with Randall L Stephenson, the American company's chairman, at the Mobile World Congress in Barcelona.

“I have been in some meetings with executives from AT&T in Barcelona, specifically with the executive chairman,” Mr Soria said on Spanish state television. “He told me he was interested in Europe, but he did not say even one word about any sort of interest in a takeover of Telefónica.”

Telefónica said it had not received any verbal or written approach from any party in response to a story in the El Mundo daily newspaper that Madrid had refused to countenance the sale of what it regarded as a strategic company when approached by AT&T.

The article said AT&T had intended to pay a 30 per cent premium in order to take over Telefónica before the Spanish government had rejected the idea and the tentative approach was called off last week.

Telefónica, its shares up by 3 per cent in early trading, said that it “had not received any approach, nor any indication of interest, neither verbal nor in written form, from any party”.

AT&T has made little secret of its desire to acquire European businesses. According to those familiar with its plans, the group wants to use its expertise in providing data services based on the introduction of high-speed mobile broadband, which is just arriving in the region on the back of the rollout of 4G networks. – (Copyright The Financial Times Limited 2013)