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Vodafone Group plc (VOD)

- NASDAQ
  • Mon, Aug. 17, 2:04 PM
    • Amid discussion and plenty of speculation about how or when Vodafone (NASDAQ:VOD) and Liberty Global (LBTYA +1.2%) are going to get together, some analysts are looking to the coming month for clarity.
    • The timetable might move based on Vodafone's actions for emerging-market assets, and how they are split from European assets.
    • While the two companies confirmed discussions earlier this summer, they squelched talk of an outright purchase/merger, saying instead that they were talking about swapping assets.
    • Nomura's James Britton sees an update coming soon on the negotiations. "The upside for both entities is clear to see and we remain confident that an offer for Vodafone Europe, which leaves Vodafone shareholders with a considerable interest in the premier convergence provider (Liberty) in Europe, will be an enticing prospect for Vodafone's board," he writes. Nomura has been on record saying an outright merger would look more attractive than an asset swap.
    • Though Vodafone has stated the companies are not considering a merger, we do not believe this is necessarily a permanent state of affairs," Citigroup's Simon Weeden wrote last month, saying the "cleanest and lowest risk" path to synergy was via "a full acquisition of Liberty by Vodafone.
    • Previously: Liberty Global, Vodafone see better rules environment for swaps (Jun. 12 2015)
    • Previously: Liberty Global CEO: Need mobile services to complete quad-play (Jun. 09 2015)
    | 3 Comments
  • Wed, Jul. 8, 11:58 PM
    • Europe is leading the world in telecoms moving to "quad-play" bundling -- adding wireless to fixed-line telephones, broadband and pay TV -- which should mean a big opportunity for firms to drive margin improvement and build some competitive moats, says Morningstar's Allan Nichols.
    • Both in-country consolidations and convergence mergers are helping build moats, he says -- the latter because it tends to lower churn as people subscribe to more services. And with lower churn, companies can lower subscriber acquisition cost.
    • His favorites in the space: Telefonica (NYSE:TEF), already a leader in triple-play and convergence in Spain and Brazil; Orange (NYSE:ORAN), leading a fiber buildout in France; and Millicom International Cellular (OTCPK:MIICF), with a high organic growth rate but low EV/EBITDA.
    • About 16% of Virgin Media customers were taking four services when it was acquired by Liberty Global (NASDAQ:LBTYA) in summer 2013, which Nichols thinks was a key factor. Liberty is now offering wireless services as an MVNO in several markets, and has agreed to buy Royal KPN's (OTCPK:KKPNY) wireless business Base.
    • From the wireless direction, Vodafone (NASDAQ:VOD) is also acquiring assets to offer other services, particularly after it bought Cable & Wireless Worldwide in the UK, and later Kabel Deutschland in Germany.
    • Europe would benefit from more cross-border mergers, Nichols says, but they're unlikely due to political constraints, and German cable consolidation is likely to run into regulatory opposition as well.
    | Comment!
  • Wed, Jun. 24, 10:32 AM
    • European cable leader Liberty Global (NASDAQ:LBTYA) is going to look for growth in the 12 continental markets it already occupies, CEO Michael Fries tells Germany's Handelsblatt, even as the company has acknowledged discussing asset swaps with Vodafone (NASDAQ:VOD).
    • "There are not many more markets, like Scandinavia, where we are not active," Fries said. "Spain, Portugal and France do not interest us."
    • The asset swap talks have focused on Liberty's and Vodafone's two key overlapping markets -- the UK and Germany -- but the UK is Vodafone's home and Liberty's largest market, while Germany is Vodafone's biggest sales market.
    • Meanwhile, in Germany, Fries hinted Liberty could swallow up more ground -- "We could certainly look at these," companies like Telecolumbus, Pepcom or Primacom.
    • But he said it didn't need to buy assets to grow in its existing markets. "Our networks reach 50 million households in Europe. However, only 25 million households are customers of ours so far. We can tap the others without great additional costs."
    • Previously: Vodafone, Liberty merger "far more attractive" than asset swap: Nomura (Jun. 23 2015)
    • Previously: Liberty Global, Vodafone see better rules environment for swaps (Jun. 12 2015)
    | 3 Comments
  • Tue, Jun. 23, 8:03 PM
    • Vivendi (OTCPK:VIVHY) and Vodafone (NASDAQ:VOD) reportedly approached Twenty-First Century Fox (FOX, FOXA) about giving up its 39% stake in Sky (OTCQX:SKYAY) -- but were rebuffed after the Murdochs started asking for a 73% premium.
    • Both companies have been linked with the British satellite broadcaster in the past. Macquarie noted that instead of setting up an asset swap with Liberty Global, a "more rational" play for Vodafone would be a content play with Sky -- and one in keeping with its 2013 buy of Kabel Deutschland.
    • Meanwhile, Vivendi was reported to have made a bid for Sky in April, but denied that.
    • That leaves speculation that Fox might want to buy the rest of Sky, having failed that in 2010 when the UK phone hacking scandal got in the way, but Sanford Bernstein's Claudio Aspersi doubts that: “If Fox is hoping to make another run at Sky in the near-term (in spite of the political opposition which likely remains high), we don't understand why they'd anchor the bid at such a high price."
    • Previously: Vodafone -2.2% after dampening Liberty merger talk (Jun. 05 2015)
    • Previously: Reuters: Vivendi may be eyeing £28B deal for Sky (Apr. 08 2015)
    | 1 Comment
  • Tue, Jun. 23, 12:23 PM
    • South Africa is near a deal on the sale of its $2.3B (27.7B rand) stake in Vodacom (OTC:VODAF), the Johannesburg-based unit of Vodafone (NASDAQ:VOD), Bloomberg reports.
    • The government is likely to sell all of a 13.91% stake in Vodacom to its state-owned Public Investment Corp. in stages, and apply the proceeds to a rescue package for state-owned power utility Eskom Holdings SOC, which has engineered blackouts amid a funding shortfall.
    • Combined with the PIC's existing stake in Vodacom, it could become the second-largest shareholder behind Vodafone's 65% stake.
    • Vodacom is up 2% in Johannesburg; Vodafone ADRs are up 0.8% on Nasdaq.
    | 1 Comment
  • Tue, Jun. 23, 3:19 AM
    • Vodafone (NASDAQ:VOD) and Liberty Global's (NASDAQ:LBTYA) discussions around asset swaps will help establish that such scenarios are far less attractive than simply combining all their European assets, Nomura says.
    • The companies have potential to create "an unrivaled integrated communications provider across Europe."
    • Total cost synergies could be $32.6B.
    • An asset exchange, on the other hand, will be difficult given the mismatch of their asset valuations.
    • Raises Vodafone to Buy.
    • Previously: Confirmed: Vodafone considering asset swap with Liberty (Jun. 5)
    • Previously: Vodafone -2.2% after dampening Liberty merger talk (Jun. 5)
    | 2 Comments
  • Mon, Jun. 22, 12:13 PM
    • With consolidation in the air, telecom players are trading significantly higher today Europe-wide.
    • Telefonica (TEF +4.5%), Telecom Italia (TI +1.9%), Orange (ORAN +8.2%), Vodafone (VOD +1.8%), KPN (OTCPK:KKPNY +5.5%), Deutsche Telekom (OTCQX:DTEGY +5.4%), Belgacom (OTCPK:BGAOY +2.7%), TeliaSonera (OTCPK:TLSNY +1.9%) and Pharol (OTCPK:PTGCY +8.5%) are all among firms getting a punch up today.
    • The richness of the proposed deal by Numericable-SFR (Altice, OTC:ATCEY) for Bouygues Telecom (OTCPK:BOUYY) -- at €10B, it suggests one of the highest regional industry EBITDA multiples (14.4x) in years -- may be lifting firms in a consolidation-friendly atmosphere, even with the hurdles this deal has to overcome.
    • French regulators have gone on the record against the deal, calling for investment: “Consolidation isn’t advisable for the sector,” says econ minister Emmanuel Macron. “Employment, investment and giving customers the best possible service should be the priority.”
    • In addition, a reluctant Martin Bouygues would need to be convinced to change his mind and sell.
    • Previously: Altice confirms Bouygues Telecom bid (Jun. 22 2015)
    | 2 Comments
  • Fri, Jun. 12, 9:19 AM
    • As Liberty Global (NASDAQ:LBTYA) and Vodafone (NASDAQ:VOD) talk about swapping assets in Europe, both companies think increased telecom competition has made Europe's regulators more relaxed about consolidation issues.
    • "We see that big telecoms providers are allowed to merge," Manuel Cubero, chief executive of Vodafone's Kabel Deutschland told Reuters in Germany. "We see that politicians support this trend in order to strengthen the ability of companies to invest."
    • Germany is one epicenter of the swaps discussion as the two companies have heavy overlap in the region. It's Vodafone's largest market by sales and likely hopes to get Liberty cable operations there in any swap -- "The more we grow, the better we can compete with Deutsche Telekom (OTCQX:DTEGY) in broadband," says Cubero -- but neither firm may be willing to part with UK business.
    • "The Commission's view of consolidation in the telecom sector in Europe has changed," says Lutz Schueler, head of Liberty's German business Unitymedia.
    • Vodafone's Kabel Deutschland and Liberty's Unitymedia are the No. 1 and No. 2 cable operators in Germany respectively. The country has 29.6M broadband connections, but 23.3M of those are via phone lines and more than half of those controlled by Deutsche Telekom.
    | 2 Comments
  • Tue, Jun. 9, 3:28 PM
    • Liberty Global (NASDAQ:LBTYA) CEO Michael Fries was quiet about Vodafone (NASDAQ:VOD) in particular, but did say that mobile services were an important growth driver that the company needed to add to its older fixed-line and Internet services.
    • It's all about getting into the "quad-play" -- being able to offer bundles with TV, Intenet, landline and mobile phone service -- a trend that is helping drive consolidation across the telecom industry.
    • The quad-play bundle is "an important piece of the puzzle," Fries says. “We see in the U.K. and Belgium that customers become more sticky."
    • Liberty probably wouldn't buy a mobile operator in the UK, though, he said, and in most other markets it's more efficient to rent mobile capacity than to buy it.
    • The company has been in asset-swap talks with Vodafone that are likely hinging on European assets, as there are cost synergies to gain even though an outright merger would be difficult to impossible considering their size.
    • The size also means that Liberty's not a takeover target, Fries says: “We are absolutely not vulnerable, in terms of becoming a target against our own will ... We have great organic growth. There are no deals we need to do to be successful.”
    • Previously: Vodafone -2.2% after dampening Liberty merger talk (Jun. 05 2015)
    • Previously: Liberty Global up 4.7%, Vodafone up 4.2% on report of merger talks (Jun. 04 2015)
    | Comment!
  • Mon, Jun. 8, 12:32 PM
    • Vodafone (VOD +0.6%) has gained as much as 12.5% after John Malone's May 19 comment about how the company would be a "great fit" with his Liberty Global, but some sober thought about regulatory risk for any deal has meant it coming a bit closer to earth, down 5.6% from the 52-week high.
    • Vodafone clarified that the companies were talking about an asset swap and talk now turns to whether Vodafone's board might consider a breakup of the firm in order to ease a deal -- in which case AT&T (NYSE:T) could re-emerge as a buyer, using cash flow from an acquisition of DirecTV (NASDAQ:DTV).
    • Vodafone is already considering an IPO of its India business, and the other emerging market operations may need to be split off as well. But CEO Vittorio Colao has been opposed to splitting the firm.
    • Oppenheimer speculated earlier this year that AT&T could acquire Vodafone and move its HQ out of the U.S. for tax savings, though the Obama administration planned to fight such strategies.
    • Meanwhile, Bank of America has upgraded Vodafone to Neutral from its previous Underperform, and raised its price target to $38 from $35. Shares are trading today at $37.27.
    • Previously: Vodafone -2.2% after dampening Liberty merger talk (Jun. 05 2015)
    • Previously: Vodafone up as Goldman says it may be an asset seller (May. 22 2015)
    | 7 Comments
  • Fri, Jun. 5, 11:39 AM
    • Vodafone (NASDAQ:VOD) is off 2.2% today after clarifying that it is talking with Liberty Global (LBTYA +1.3%), but about asset swaps instead of an outright merger.
    • A merger would be difficult considering the size of both companies; it would be one of the largest deals ever on enterprise value. But where would asset swaps happen?
    • Swaps would be best where the overlap is heavy: in Germany, the UK and the Netherlands. But neither company seems likely to give up on the UK, Thao Hua notes. It's Liberty's largest market (and where it draws a chunk of tax benefits), and Vodafone's home. Meanwhile, Germany is Vodafone's biggest sales market.
    • "I do not think Malone wants to exit any of U.K., Germany or Netherlands," Wunderlich's Matthew Harrigan says.
    • Meanwhile, Macquarie's Amy Yong and Guy Peddy point out that "neither Vodafone nor Liberty Global have any track record of integrating wireless and cable TV assets." They had previously described a "more rational" deal for Vodafone would be tying up with Sky (OTCQX:SKYAY) in a content play.
    • They add: "Any deal with Liberty Global would in our view result in a transfer of value from Vodafone to Liberty Global."
    • Previously: Liberty Global up 4.7%, Vodafone up 4.2% on report of merger talk (Jun. 04 2015)
    • Previously: Vodafone-Liberty still good strategy, but not a slam dunk (Jun. 02 2015)
    | 3 Comments
  • Fri, Jun. 5, 3:50 AM
    • Putting an end to the speculation, Vodafone (NASDAQ:VOD) has confirmed it has held talks with Liberty Global (NASDAQ:LBTYA) to exchange some of their businesses in Europe, but said it was "not in discussions concerning a combination of the two companies."
    • Liberty broke cover on its interest in exploring a potential merger two weeks ago after chairman John Malone pointed to "substantial synergies" should it merge with Vodafone.
    • Previously: Liberty Global up 4.7%, Vodafone up 4.2% on report of merger talk (Jun. 04 2015)
    | 1 Comment
  • Thu, Jun. 4, 5:57 PM
    | 2 Comments
  • Tue, Jun. 2, 1:59 PM
    • Despite merger talk that has lifted Vodafone (NASDAQ:VOD) more than 7% in the past two weeks -- and a good strategic case -- a tie-up with John Malone's Liberty Global (NASDAQ:LBTYA) isn't simple or all that close, Thao Hua notes.
    • Breakups might be required, as neither company is easy to swallow whole (Vodafone's EV is about £90B; Liberty's about $90B). The pair could save nearly $30B if Vodafone's European division was split off (from Africa, Middle East and Asia Pacific) and merged with Liberty's in an equity-funded JV.
    • But splitting a business costs as well, and Liberty would probably require operational control to go along. And regulatory issues could be onerous, particularly country by country as different units might combine for market dominance in some areas.
    • Over the same time frame since Malone called a potential combo "a great fit" and reignited speculation, Liberty Global (LBTYA) is up 7.9%.
    • Previously: Vodafone stakeholders: More open to Liberty tie-up (May 28 2015)
    • Previously: Vodafone jumps on Malone comments (May 20 2015)
    • Previously: Liberty's Malone: Combo with Vodafone would be 'great fit' (May 19 2015)
    | 2 Comments
  • Thu, May 28, 2:50 PM
    • The "great fit" that John Malone spoke of last week between Liberty Global (NASDAQ:LBTYA) and Vodafone (VOD +1.1%) is being echoed by key Vodafone investors -- now that they feel like they're in a stronger position for a more equal deal.
    • Some of the telecom's biggest investors have signaled openness to a deal, with one top shareholder saying "There is a strategic rationale to the combination of the assets."
    • Shares in Vodafone reached a 14-year high this week after the Liberty chairman's comments re-opened the door to merger speculation.
    • Analysts figure a deal between the two could bring gross synergies of £16B.
    • It likely comes down to the power balance: "Liberty are still fractionally more in the driving seat but the deal makes strategic sense for both parties ... For the perfect quad play, they need Vodafone as much as Vodafone needs them," said another top shareholder.
    • Liberty A shares (LBTYA) and C shares (NASDAQ:LBTYK) are down 1.9% today; B shares (NASDAQ:LBTYB) are up 0.5%.
    | 1 Comment
  • Wed, May 20, 6:23 AM
    • Vodafone (NASDAQ:VOD) shares jumped over 4% in London today after John Malone, chairman of cable group Liberty Global (NASDAQ:LBTYA), opened the door to a long mooted merger of the two groups.
    • Malone called the combination a "great fit" and cited "very substantial synergies if we could find a way to work together or combine the companies with respect to western Europe."
    • A tie-up would create a telecom behemoth, between Liberty's $45B in market value and Vodafone's $93B.
    • Previously: Liberty's Malone: Combo with Vodafone would be 'great fit' (May. 19 2015)
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Company Description
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.