Vodafone buying Greek ISP; questionable AT&T rumor emerges

|About: Vodafone Group Plc (VOD)|By:, SA News Editor

Vodafone (VOD +1.3%) is paying €72.7M ($97M) to acquire a 72.7% stake in Greek broadband/phone service provider Hellas Online. The deal will bring Vodafone's total stake above 91%, and is expected to close in Q4.

Hellas had 519K customers at the end of 2013, good for an estimated 11% local share. It had 2013 revenue of €227.4M, and EBITDA of €68.4M.

The deal follows Vodafone's acquisitions of German cable provider Kabel Deutschland and Spanish cable provider ONO, as the carrier pushes ahead with its goal of offering mobile/wireline bundles (both by itself, and via partnerships) throughout Europe.

Separately, The Daily Mail has passed on a rumor that AT&T's (NYSE:T) advisers are now "working around the clock on a cash bid worth more than £3 a share" for Vodafone.

The rumor should be taken with a heavy dose of salt, given: 1) AT&T is currently preoccupied with closing the DirecTV acquisition. 2) It implies AT&T would be paying a 46% premium to Vodafone's current London trading price, and valuing the company at ~$130B. 3) AT&T, which has a $179B market cap and $84B in debt, would be very hard-pressed to finance a ~$130B deal solely with cash.

A 6-month prohibition on an AT&T bid for Vodafone ended in July. However, AT&T CEO Randall Stephenson stated in March "the window may be closing" for his company to acquire European wireless assets, and is reportedly unhappy with Vodafone's wireline expansion efforts.