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Vodafone Group plc (VOD)

  • Mon, Sep. 28, 9:39 AM
    • Vodafone (VOD -3.1%) and Liberty Global (LBTYA -3.7%) were among early premarket sliders in telecom today after the two broke off discussions over swapping European assets.
    • The cost of insuring Vodafone's debt dropped the most in nearly four months, and bonds of Liberty Global's units fell to their own records. Virgin Media (a likely Vodafone target) saw its January 2025 bonds slip to 92.8c/euro, lowest since issuance, while Germany's Unitymedia bonds fell 5.1 cents to a record low 84.4 cents.
    • Barclays reiterated its Overweight rating on the shares with a 250-pence price target. Shares are down 3.7% in London to 209.7p, implying a 19% upside in Barclays' target.
    • Previously: Vodafone ends talks with Liberty Global over asset swaps (Sep. 28 2015)
    | Mon, Sep. 28, 9:39 AM | Comment!
  • Mon, Sep. 28, 2:48 AM
    • Vodafone (NASDAQ:VOD) says it's called off talks with Liberty Global (NASDAQ:LBTYA) over a swap of assets.
    • Amid rumors of an outright merger earlier this summer, the two confirmed they were talking about swapping some European businesses, but the talks faced challenges from the outset and are over for now.
    • The companies never specified which assets -- though the best fit seemed to be where they had heavy overlap: in Germany, the UK and the Netherlands. But the UK is Liberty's largest market, and Germany is Vodafone's biggest sales market, and it seemed increasingly unlikely the two would bail out of those markets.
    • Liberty had long coveted Vodafone's bigger Kabel Deutschland business, while Vodafone probably was looking at Liberty's Virgin Media.
    • Previously: Vodafone -2.3% as Liberty Global tie-up seems troubled (Sep. 15 2015)
    • Previously: Summer's end may bring resolution for Vodafone, Liberty (Aug. 17 2015)
    | Mon, Sep. 28, 2:48 AM | 5 Comments
  • Mon, Sep. 21, 10:38 AM
    • Vodafone (VOD +0.5%) and other rivals of BT Group (BT -0.3%) have renewed their call for radical reform of the UK telecom market, including a competition investigation and a split of wholesale business Openreach from BT Group proper.
    • In an open letter in the Financial Times, chiefs of Vodafone UK, Sky (OTCQX:SKYAY), TalkTalk (OTC:TKTCY) and Daisy Group claim that British regulator Ofcom has found serious problems in the ownership of the national network by BT Openreach.
    • For its part, BT Group says that it continues to invest billions in Openreach and that the business is exceeding service targets set by Ofcom.
    • Meanwhile, Vodafone's tie-up talks with Liberty Global (LBTYA +0.6%) are snagging over complicated tax arrangements at Liberty and its Virgin Media cable net, The Telegraph reported. The companies have discussed swapping assets, but Liberty reportedly depends on Virgin Media's billions in losses to lower its tax burden.
    | Mon, Sep. 21, 10:38 AM | Comment!
  • Tue, Sep. 15, 9:32 AM
    • Vodafone (NASDAQ:VOD) is off 2.3% amid the newly tougher regulatory scheme that likely has put a kibosh on a merger with Liberty Global (NASDAQ:LBTYA).
    • A shift in approach to the hard line by European Commission competition chief Margrethe Vestager recently got TeliaSonera and Telenor to call off a merger of their Danish operators. And Liberty is offering up fresh concessions in an effort to seal its effort to buy KPN's Belgian operator Base.
    • John Malone is still looking for common ground with Vodafone over some kind of tie-up, he tells Bloomberg, as those talks seem to stall. Discussions about a full merger that initially moved stocks turned to talks over an asset swap in Europe, as Vodafone insists it's not talking about the full deal.
    • "Obviously there’s a price at which Liberty Global could be bought," Malone said. "I don’t believe that that’s likely for the other side to get there -- an outright purchase of the whole company. Other than that, it’s a question of could you figure out some way to live together."
    • Vodafone chief Vittorio Colao should "retire" now that the merger talks have fallen apart, says telecom analyst Neil Campling of Aviate Global. Asset swaps seem unlikely in key markets the UK and Germany, he says. “While we can find reasons to invest in Liberty Global on a standalone basis, the same cannot be said for Vodafone," he says. "What's next? Vittorio, surely, will retire and head for the sunshine/ski slope. He should.”
    • Meanwhile, Vodafone India has begun talks with IBM to renew a 660B-rupee ($1B) outsourcing contract that expires in June. Other vendors, including Wipro, Tata Consultancy, Infosys and Tech Mahindra, could push for the deal.
    | Tue, Sep. 15, 9:32 AM | 1 Comment
  • Fri, Sep. 4, 1:44 PM
    | Fri, Sep. 4, 1:44 PM | 4 Comments
  • 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)
    | Mon, Aug. 17, 2:04 PM | 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.
    | Wed, Jul. 8, 11:58 PM | 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)
    | Wed, Jun. 24, 10:32 AM | 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)
    | Tue, Jun. 23, 8:03 PM | 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.
    | Tue, Jun. 23, 12:23 PM | 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)
    | Tue, Jun. 23, 3:19 AM | 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)
    | Mon, Jun. 22, 12:13 PM | 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.
    | Fri, Jun. 12, 9:19 AM | 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)
    | Tue, Jun. 9, 3:28 PM | 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)
    | Mon, Jun. 8, 12:32 PM | 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)
    | Fri, Jun. 5, 11:39 AM | 3 Comments
VOD vs. ETF Alternatives
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.