Telefonica Top Shareholders Said to Back Possible Share Offering

Major shareholders of Telefonica SA, including the Spanish government and CriteriaCaixa SA, are open to backing a capital increase if Chairman Marc Murtra needs funds for acquisitions or to cut debt, people familiar with the matter said.

Murtra, who took over in January and then kicked off a strategic review, has said Telefonica should play a leading role in European telecommunications consolidation. But while he favors deals in the industry, he hasn’t said how his highly leveraged company could fund them.

The carrier’s main investors have indicated that Murtra can rely on them for funding, according to the ...