Telefónica, the eurozone's largest telecoms group by market value, and the Spanish government have denied reports that Madrid had knocked back a takeover approach from AT&T, the US telecoms operator. José Manuel Soria, Spain's industry minister, said on Monday morning that he had no knowledge of any approach for Telefónica from AT&T, but acknowledged that he had met with Randall Stephenson, the US company's chairman, at the Mobile World Congress in Barcelona. Shares in the group rose on Monday morning following reports that AT&T had tabled a €70bn tender offer for the heavily indebted company. Telefónica said on Monday morning 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. Telefónica shares were up 3 per cent in late afternoon trading. AT&T has made little secret of its desire to acquire European businesses to expand its business outside the US. 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. The US group can also use its strong balance sheet and higher valuation to pick up cheaper businesses in Europe that have been hit hard by the recession and regulatory moves that have forced revenues down. Companies such as Telefónica also own overseas assets in Latin America, which would be highly attractive to AT&T. Randall Stephenson, chief executive of AT&T, told an investor conference last month that he found Europe "fascinating right now," but said that finding suitable acquisitions had proven difficult. AT&T has been linked with the various assets that are regarded to be for sale, such as EE, the UK telecoms group jointly owned by France Telecom and Deutsche Telekom, which is being prepared for a flotation or sale at the end of the year. The group's relationship with Carlos Slim's America Movil has also raised the possibility of working together, with the Mexican group already an investor in KPN and Telekom Austria.