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Vodafone buying Greek ISP; questionable AT&T rumor emerges

  • 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.
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Comments (4)
  • richjoy403
    , contributor
    Comments (9654) | Send Message
    I don't doubt that T would be investigating offshore telecom opportunities having higher growth rates than the USA, but I won't accept T would swallow VOD unless the evidence is much stronger than a rumor.
    22 Aug, 10:40 AM Reply Like
  • Energysystems
    , contributor
    Comments (1137) | Send Message
    There was previous talk of T being interested in specific VOD assets, but looking to possibly partner with another telecom in order to divest assets that $T isn't specifically interested in. Carlos Slim was previously mentioned as being interested in those other assets.
    22 Aug, 11:09 AM Reply Like
  • Just Some Guy
    , contributor
    Comments (567) | Send Message
    So that's the price bump today?


    Well, VOD is more than 15% lower today than last time these rumors were loose. Might be worth an internal re-evaluation, figure at what low price they would be compelled to try.
    22 Aug, 11:37 AM Reply Like
  • 15865932
    , contributor
    Comments (245) | Send Message
    VOD I could understand with lots of international synergies and the huge push by Colao for white label status of the virtual wallet (M-Pesa for emerging market, SmartPass partnered with Visa in developed markets). DTV is soon to be a fading video delivery tech as wired line pushes well past 100 mbps allowing for seamless IP TV. Strange game play by Stephenson to say the least. Like buying an AOL before dial up gets trumped.
    25 Aug, 12:46 PM Reply Like
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