Seeking Alpha

Vodafone shares plunge after AT&T says won't make offer

  • Vodafone's (VOD) shares have slumped 6.4% in London after AT&T (T) said it has no intention of making an offer for the U.K. telecom operator.
  • AT&T made a statement to the London Stock Exchange in response to a request from the the U.K.'s Takeover Panel following much speculation that the U.S. provider was interested in Vodafone after the latter agreed to sell its 45% stake in Verizon Wireless to Verizon for $130B last year.
  • The statement means that AT&T can't make an offer for Vodafone for the next six months unless the British company agrees to it, another firm makes a proposal, or the authorities decide that circumstances have changed materially. (PR)
From other sites
Comments (4)
  • Stone Fox Capital
    , contributor
    Comments (7490) | Send Message
     
    shocking that the stock has any premium in it based on the unlikely T bid. Too many issues to even go down that road after T-Mobile.
    27 Jan 2014, 03:48 AM Reply Like
  • notta lackey
    , contributor
    Comments (131) | Send Message
     
    This may have been strategic. Vodafone is not in play with any U. S. company until it distributes its Verizon shares to its stockholders because of antitrust considerations. In fact, that is probably why it structured the deal so it didn't get the shares itself. It will probably take 6 months to finish that deal, so it was a free pass and bow shot by AT & T.
    28 Jan 2014, 09:18 PM Reply Like
  • 15865932
    , contributor
    Comments (313) | Send Message
     
    Distribution will be completed February 21 and new issue of VOD will begin trade on Feb.24th. Bloomberg story indicates "AT&T chose the second option to avoid negotiating under such a tight deadline and because of the possibility of exemptions from the moratorium, the people said."

     

    T would have been required to launch a formal bid within 28 days if they had answered yes. VOD and VZ shareholders had not yet approved the payout plan and shares to be issued etc. Those votes took place within just two days after the filing by T with the UK takeover panel. There wasn't a chance in the world T was going to commit to a bid launch within 28 days when vital votes were still pending. Tons of media pieces fail to disclose the six month restriction only prevents a hostile bid by T. The "exemptions" list is three pronged and the first is VOD's board can waive the six month period. ....keeping in mind here this marriage proposal is a friendly affair and never expected to be hostile. The gate opens in less than 3 weeks when VOD trades free of VZ interests on Feb. 24th.

     

    -Other two exemptions includes a third party bidder launches an offer for VOD (would allow T to tender a competing bid within the 6 month period in the event such occurred like a Softbank bid being launched). The last exemption is a material change in the company recognized by the UK takeover panel. Not sure how they could deny a material change has taken place after VOD cuts a 84B (USD) special dividend upon closing of its Verizon Wireless ownership sale. If that isn't a material change then I don't know what is.
    4 Feb 2014, 12:11 PM Reply Like
  • notta lackey
    , contributor
    Comments (131) | Send Message
     
    Looks like you know more about it than I. But the bottom line is T hasn't really walked away, and it knocks a couple bucks off VOD in case of merger negotiations.
    6 Feb 2014, 11:10 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs