Sep. 13, 2013, 4:25 PM
- Even though over 75% of Kabel Deutschland (KBDHY.OB) shares have been voted in favor of Vodafone's (VOD +0.6%) $14.2B acquisition of the company, 3 hedge funds - well-known activist fund Elliott Management, and shareholder funds Davidson Kemperer and York Capital - that tendered shares to help enable the acquisition plan to sue Vodafone in an attempt to obtain a higher price, according to Reuters.
- Elliott founder Paul Singer has been arguing Vodafone's offer undervalues Kabel, but hasn't specified an appropriate price. Even if a lawsuit is likely to fail in court, its ability to drag out the closing of a deal could compel Vodafone to negotiate.
Sep. 13, 2013, 10:41 AM
- Sources tell Bloomberg Orange (ORAN -0.9%) and Deutsche Telekom (DTEGY.PK) are delaying the sale of their Everything Everywhere U.K. mobile JV (has an early 4G lead) as they wait for AT&T (T +0.5%) to make its expected entry into Europe. AT&T has reportedly eyed a number of European assets, including EE.
- Likewise, Bloomberg joins other news sources in reporting Telefonica (TEF +0.2%) is thinking of growing its Telecom Italia (TI -1.5%) stake by taking full control of holding company Telco.
- Debt-laden European carriers have been shedding assets left and right. But they're now showing an interest in getting bigger, thanks both to AT&T and a growing willingness by regulators to sign off on consolidation.
- Orange CEO Stephane Richard has predicted approval of a proposed merger of Telefonica and KPN's German units, which would lower the number of mobile carriers in Europe's largest market to 3, would "create an [M&A] earthquake" on the continent. Richard added Orange would attempt to grow its Spanish/Polish positions, and consider wireline acquisitions in Belgium and Romania, if regulators don't object.
- EU antitrust chief Joaquin Almunia has said there's no "magic number" for how many carriers need to be in a market. Meanwhile, proposed telecom rules stand to encourage M&A, both by hurting carrier profitability in individual markets and by harmonizing rules across markets.
- Vodafone (VOD +0.3%) is expected to invest a chunk of its Verizon Wireless windfall in European assets. And there's plenty of speculation AT&T will make a bid for the giant international carrier.
Sep. 13, 2013, 9:48 AM
- Intel (INTC +2.5%) has been upgraded to Buy by Jefferies in the wake of the Intel Developer Forum and its many product announcements (I, II).
- Alcatel-Lucent (ALU -0.9%) has been cut to Market Perform by BMO following a huge summer rally.
- Former JV partners Verizon (VZ +0.8%) and Vodafone (VOD +0.9%) have been upgraded to Overweight by Evercore. Vodafone just won a closely-watched shareholder vote for the Kabel Deutschland deal.
- Oclaro (OCLR +15.1%) has been upgraded to Buy by B. Riley in response to the II-VI deal.
- Akamai (AKAM +1.3%) has been upgraded to Buy by Canaccord.
- Monolithic Power (MPWR -2.2%) has been cut to Hold by Needham.
Sep. 12, 2013, 2:55 PM
- In spite of hedge fund opposition, Vodafone (VOD +0.7%) says 75% of Kabel Deutschland shares have been voted in favor of the mobile's carrier's €87/share offer for the German cable provider, clearing the way for the deal to close.
- Altogether, Vodafone is paying €10.7B ($14.2B) for Kabel (€7.7B in cash + $3B in assumed debt). The Verizon Wireless windfall should make the purchase pretty easy to digest. Vodafone has said the deal will grow the size of its German revenue base to €11.5B/year ($15.3B/year).
- Separately, Vodafone U.K. CEO Guy Laurence is leaving to become the CEO of Canadian carrier Rogers (RCI -1.4%). U.K. enterprise exec Jeroen Hoencamp will replace Laurence.
- Rogers' hiring of Laurence comes 7 months after the company' current CEO, Nadir Mohamed, announced plans to retire in Jan. '14. Laurence will take over the top job on Dec. 2.
Sep. 12, 2013, 7:04 AM
- The EU's plan to scrap roaming charges for incoming calls from July 2014 and put a limit on other tariffs, which it announced yesterday, could leave the telecom sector open to more consolidation if the rules come into force, analysts reckon.
- "Margins are going to be wafer-thin," says CMC Markets' Michael Hewson. "There are already too many companies operating in Europe...and with these new rules, the capacity for European companies to make a profit will be greatly reduced.
- However, Hewson points out that the regulations will only apply to calls and not data, which tends to be more expensive.
- Companies that will be hit by the rules include Telefonica (TEF), Vodafone (VOD) and Orange (ORAN), and it makes you wonder whether AT&T (T) will still want to make acquisitions in the EU.
Sep. 12, 2013, 5:32 AM
- A hacker has stolen the personal information of 2M Vodafone Germany (VOD) customers in the latest cyber-attack on a major corporation.
- The data accessed included names, addresses, dates of birth, gender, sort codes and account numbers. However, the hacker wasn't able to see credit card information, passwords, PIN numbers, mobile phone numbers or data connections. Customers in other countries have not been affected.
- Vodafone said the attack was only possible with "insider knowledge" of the company's IT infrastructure.
- Police have already identified a suspect and seized his assets. (PR)
Sep. 11, 2013, 7:16 AM
- Vodafone (VOD) was far away from securing shareholder approval for its €7.7B takeover of Kabel Deutschland (KBDHF.OB) as of 5.30 pm in Germany yesterday, not long before the offer is due to lapse at midnight tonight.
- Kabel investors had tendered 19.88% of shares, well below the 75% minimum requirement that Vodafone has set for the deal to go through.
- Kabel Deutschland's biggest shareholder, U.S. activist investment fund manager Paul Singer, wants Vodafone to raise its offer for the German company, but the British operator has refused to do so. (PR)
Sep. 9, 2013, 4:21 AM
- Kabel Deutschland (KBDHY.OB) shareholders reportedly fear that Vodafone (VOD) won't reach the required level for its €7.7B acquisition of the German cable operator to go through.
- Vodafone has stipulated that 75% of Kabel Deutschland shares need to be tendered by Wednesday in what is the first stage of a two-step approval process. The U.K. operator could lower the level before the deadline but said it has no intention of changing the conditions.
- Failure to buy Kabel Deutschland could make Vodafone vulnerable to a takeover bid from AT&T (T), which is thought to be interested in the British carrier's European mobile assets but not its cable operations.
Sep. 6, 2013, 5:29 PM
- Hedge fund manager Mike Bergen reports hearing John Paulson is buying a major stake in Vodafone (VOD).
- Bergen: "This is a liquidation story now. Break-up value is 50% higher.."
- Vodafone's Verizon Wireless deal will leave it with $65B in cash (more than enough to eliminate its $38.8B in net debt) and a $65B equity stake in Verizon. There are already reports AT&T would be interested in Vodafone's international assets once the Verizon deal closes.
Sep. 6, 2013, 1:14 PM
- As expected, EC telecom commissioner Neelie Kroes has submitted a draft law that would end mobile voice, text, and data roaming fees (in favor of flat-rate charges) for consumers traveling from one EU market to another.
- Kroes proposes to achieve this by having carriers establish "alliances" with peers in other EU markets. She's giving carriers incentives (in the form of more relaxed rules on international roaming deals) to adopt the proposals by July '14.
- Unsurprisingly, local carriers such as Vodafone (VOD +0.5%), Orange (ORAN +0.5%), Telefonica (TEF +1.7%), Telecom Italia (TI +1.1%), Portugal Telecom (PT +1%), and Deutsche Telekom (DTEGY.PK) aren't thrilled with the roaming proposals, which they estimate could cost them €7B/year.
- Other proposed rules in the draft law, which aims to create a common EU telecom market, include the harmonizing of spectrum sale rules across countries, and the establishment of net neutrality-like safeguards to prevent carriers from blocking rival services. There's no proposal to create an EU-wide telecom regulator, as had been speculated.
- Previous: EU ditches effort to slash wholesale roaming fees
Sep. 3, 2013, 4:49 PM
- African mobile subscriptions (863M as of Q2) are set to expand at a 6.6% CAGR to 1.25B by 2018, according to ABI Research.
- Due to "lower comparative 3G penetration of 13.8%," 3G subscriptions are forecast to grow from 114M in 2013 to 210M in 2015. By 2018, the continent is expected to have 51.2M LTE subscriptions, up from a mere 200K in Q2 and representing a CAGR of 118%.
- Major African carriers such as Vodafone (VOD), VimpelCom (VIP), MTN Group (MTNOY.PK), Telkom SA (TLKGY.PK), Orascom (ORSTF.PK), and Maroc (MAOTF.PK) stand to benefit from the growth, which easily surpasses that seen in most developed markets.
Sep. 3, 2013, 9:55 AM
- Nokia (NOK +38.5%) has been upgraded to neutral ratings by Credit Suisse, Bernstein, and Oppenheimer following the Microsoft deal.
- Vodafone (VOD -3%) has been upgraded to Market Perform by Bernstein, and cut to Neutral by Macquarie, in the wake of the Verizon deal.
- Canadian carriers BCE (BCE +4.4%) and Telus (TU +6.8%) have been upgraded to Outperform in response to Verizon/Vodafone, and Verizon's subsequent assertion it has no plans to enter Canada.
- AT&T (T +0.6%) has been upgraded to Neutral by Macquarie.
- Palo Alto Networks (PANW -1.5%) has been downgraded to Market Perform by JMP.
- Cvent (CVT +1.4%) has received three bullish ratings and one neutral one, and YuMe (YUME +1.5%) has received four bullish ratings, as underwriters launch post-IPO coverage.
Sep. 3, 2013, 4:03 AM
- Vodafone (VOD) -1.5% in London following news of the sale of its 45% stake in Verizon Wireless for $130B.
- Vodafone plans to use the money on its own networks, CEO Vittorio Colao has said. Acquiring foreign assets is an option but Vodafone won't do it immediately.
- Although the company will pay its shareholders $84B in cash and Verizon stock, it also intends to launch Project Spring, a £6B ($9.3B) scheme to invest in 4G infrastructure and fiber-optic cables.
- Meanwhile, John Malone said he would consider an offer for Liberty Global (LBTYA), Europe’s largest cable-television operator, but he's "happy" with with the company as is. Liberty has been mentioned as a possible Vodafone target.
Sep. 2, 2013, 1:22 PM
- Verizon Communications' (VZ) $130B purchase of Vodafone's (VOD) stake in Verizon Wireless is official.
- VOD will get $58.9B in cash, $60.2B in VZ stock (which will go to VOD shareholders), and $11B from other transactions.
- The deal will be immediately accretive to the tune of 10% for VZ. (PR)
- VOD will return $23.9B of the cash to shareholders and the company says it will "increase the total FY14 dividend per share by 8%." (PR)
- Moody's cut Verizon's long-term debt rating by one notch to Baa1 following the announcement.
Sep. 2, 2013, 3:05 AM
- Vodafone (VOD) says it is in "advanced discussions" to sell its 45% stake in Verizon Wireless to Verizon Communications (VZ) for $130B in cash and shares.
- The company will make a further announcement "as soon as practicable," which reports say could be today.
- The sides were working late into the night to iron out the final details, sources say, including the cash-stock ratio of the deal.
- The debate about what Vodafone should do with the proceeds of the deal is already well under way: while shareholders are hoping for a healthy windfall, the FT reports that the company is interested in expanding its presence in the wire-line sector in Europe with deals similar to its proposed acquisition of Kabel Deutscheland. Liberty Global (LBTYA) has cropped up in the speculation as a potential target. (PR)
Sep. 1, 2013, 2:54 PM
- Verizon Communications (VZ) and Vodafone (VOD) have reached a deal on VZ's purchase of VOD's 45% stake in Verizon Wireless, WSJ says.
- As expected, VZ will pay around $130B for the stake, in "roughly equal portions of cash and stock."
- An official announcement is expected as soon as Monday afternoon.
- Previous: VZ, VOD boards expected to vote on wireless deal.
VOD vs. ETF Alternatives
Vodafone Group PLC is engaged in providing voice and data communications services for all types of customers. The Company has presence in Europe, the Middle East, Africa, the Asia Pacific region and the United States.
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