Vodafone off sharply; FT highlights recent AT&T remarks

As European 4G investments ramp, "the window may be closing" on acquiring continental wireless assets, AT&T (T -0.4%) CEO Randall Stephenson stated last week at a Morgan Stanley conference (transcript). At the same time, he argued "there are still other opportunities" in Europe, such as those tied to the development of "global" SIM cards that can work with any type of device worldwide.

Those remarks were highlighted by a weekend FT column declaring Stephenson had "poured more cold water." on hopes of an AT&T bid for Vodafone (VOD -4.2%). The AT&T chief has already been reported to have told investors further cable acquisitions by Vodafone would complicate a bid.

Meanwhile, Vodafone CEO Vittorio Colao states recently-acquired Kabel Deutschland will act as the "core" of a wireline business in Germany and possibly other countries. He adds Vodafone's wireline ops will expand to include security, Web hosting, and entertainment services (previous).

Colao was cryptic when asked about Vodafone's reported efforts to acquire Spanish cable giant ONO. "We'll see what happens."

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Comments (7)
  • Mikie713
    , contributor
    Comments (548) | Send Message
    ATT can throw all the cold water they want on VoD. They're talking out of both sides of their mouth. The CEO is talking about the "globalization" of the cell phone and opportunities in Europe. There is no bigger opportunity than acquiring VoD. After ATT justly beats down its share price that is. With VoD down sharply in recent sessions, my gut tells me ATT lusts for VoD to land under $30 a share to make their move later this year. Mark my words.
    10 Mar 2014, 02:10 PM Reply Like
  • 0xfc
    , contributor
    Comments (41) | Send Message
    If VOD were to fall to approximately $30 a share the dividend yield would be around 10%. From what I have read about the company is that they plan to avoid dividend cuts but they would have slow dividend growth. Would not that put a floor on how low the stock price might fall once investors start seeing a telecom with a 7.8-8.8% yield that has the ability to pay it over the medium term?


    I am long T and VZ. I did noy buy VOD today because I felt it has more room to fall but I did not imagine $30 could happen over the next 6 months. I am hoping to see a 8% yield.
    10 Mar 2014, 02:35 PM Reply Like
  • 15865932
    , contributor
    Comments (441) | Send Message
    Mikie713, A new SA article has this old SA piece referenced and I read your post. Looks like your $30 spot call might happen. We have to trust Colao will keep his cool once again (i.e. VZ Wireless) and demand better than a book price. Market cap is ridiculously low given VOD global market coverage, emerging markets holding exponential growth, mobile banking positioning. Compare this position to a T, VZ, CHL, or just plane ridiculous to think a player like DTEGY should have a market cap anywhere near VOD's.


    Your words were marked for sure. You might hit the nail on the head if the recent BSN article has reliable sources on BOTH sides of VOD/T. The BSN piece was the first I've ever read that VOD was working on a deal which would mean there is a tentative deal already in play with some formalities being hammered out by legal teams. Time will tell.
    10 Oct 2014, 10:29 AM Reply Like
  • Mikie713
    , contributor
    Comments (548) | Send Message
    How does that Sinatra song go? "Out of the tree of life I picked me a plum." Might be the tune $T is singing right now. $VOD might have been off even more today without the news of winning the tax dispute in India.
    10 Oct 2014, 04:03 PM Reply Like
  • dostoevsky228
    , contributor
    Comments (321) | Send Message
    Stephenson is an absolute inept CEO! Why he wasn't fired for the T-Mobile debacle continues to amaze me.
    10 Mar 2014, 02:33 PM Reply Like
  • Mikie713
    , contributor
    Comments (548) | Send Message
    He's as transparent as they come. VoD's CEO Colao maintains his cool, come what may.
    10 Mar 2014, 02:37 PM Reply Like
  • Just Some Guy
    , contributor
    Comments (2374) | Send Message
    But just what are the near-term dividend prospects for VOD?


    I just got the mail on the share distribution for VOD from the VZ buyout, that's a lot of new shares. And what is the yield they get on the buyout cash and new investments over the next year or two?


    I think only if dividends fall is there any chance the share price would fall beneath the 200ma, which is about 34 right now. Or of course if interest rates spike up and/or the market spikes down. If T wants to get greedy and buy VOD they'll have to move fast and offer a healthy premium, I think, well above the recent highs.


    VOD is in a pretty volatile situation right now, it seems to me. FWIW I just bought in a little more (beyond the distribution!) but then had second thoughts on the dividend prospects.
    11 Mar 2014, 01:12 PM Reply Like
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