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)
Tue, May 19, 6:08 PM
- Liberty Global (NASDAQ:LBTYA) rose into today's close, +2.3%, as telecom titan John Malone says a combination of his firm and Vodafone (VOD -0.9%) would be a "great fit" with "very substantial synergies if we could find a way to work together or combine the companies with respect to Western Europe."
- Malone was making his first public comments on a combination in an interview with Bloomberg, though he wouldn't comment on whether the companies were talking. A tie-up would create a telecom behemoth, between Liberty's $45B in market value and Vodafone's $93B.
- Citigroup has said a stock-based combination could generate synergies of £1.4B/year in free cash flow. But Malone is aware of philosophical differences in approach: “Their philosophy is low leverage, low risk and high cash payout to their shareholders. I prefer to grow equity value.”
- Liberty has been acquisitive in Europe and is also seeking targets in faster-growing South America, and Mexico -- a market Malone considers most attractive.
- Previously: Vodafone -3.8% following signs of life in FQ4 earnings (May. 19 2015)
Mon, Apr. 27, 11:18 AM
- Halfway through a massive investment in its network infrastructure, Vodafone (NASDAQ:VOD) may have found the European market shifting around it, leaving it to play catch-up to rivals, Thao Hua notes.
- The company's £19B ($29B) "Project Spring" plan -- in part funded by selling its stake in Verizon Wireless -- aims to shore up fiber infrastructure in Europe and developing countries. But while it's spent years building Europe's largest mobile network, rivals like Orange (NYSE:ORAN) and Telefonica (NYSE:TEF) have outpaced it in bundling mobile with fixed-line telecom, Internet and TV.
- Raymond James notes a combination with Liberty Global (NASDAQ:LBTYA) would scale up fixed-line assets in Europe -- including the U.K., where Vodafone faces two competitors getting bigger through merger (BT-EE; O2-Hutchison Whampoa) -- but Vodafone is scrambling to digest the acquisitions it's already made.
- Revenues have been slipping and competitive pressure means the payoff for investors may be getting further away.
Tue, Apr. 21, 10:04 AM
- After weeks of speculation, Vodafone (NASDAQ:VOD) has reportedly started early talks on a bid for Portugal cable operator Cabovisao, which owner Altice (OTC:ATCEY) must sell (along with Oni) in order to get an OK to take over Portugal Telecom.
- The talks kick off a process that should last through the summer. The EU has approved Altice's deal with Portugal Telecom conditional on its sales of the Portuguese businesses.
- The arrangement was shaped by the EC's concerns about ensuring consumers didn't face higher prices and lower competition through the deals.
Mon, Mar. 23, 7:06 PM
- The long road to Hutchison Whampoa's (OTCPK:HUWHY) £10.5B ($15.7B) purchase of British wireless firm O2 (NYSE:TEF) is close to its end, and a deal could be announced Tuesday morning, the Financial Times reports.
- A merger of O2 with Hutchison's Three will turn UK mobile into a three-party race, divided between the new entity, Vodafone and leader EE. It'll draw regulatory attention, but similar European deals have been approved in other countries.
- Hutchison is likely to get outside financing help, selling about 30% of the group to investors, possibly from Qatar, Singapore or Canada.
- Vodafone (NASDAQ:VOD) -- which raised competitive concerns about BT Group's acquisition of EE -- will also express concern about this tie-up, as it has a network-sharing agreement with O2.
- Previously: BT wraps £12.5B deal to buy Britain's largest mobile firm (Feb. 04 2015)
- Previously: FT: Telefonica set to sell O2 to Hutchison for $15B+ (updated) (Jan. 22 2015)
Thu, Mar. 19, 4:21 PM
- Vodafone (NASDAQ:VOD) has signed a letter of intent with investor F2i to buy a stake in Italian fiber network owner Metroweb Italia, Bloomberg reports. F2i currently owns 54% of Metroweb, whose metro and long-haul fiber services reach the northern cities of Milan, Genoa, and Bologna.
- No financial details are mentioned in the LOI, but two sources state Vodafone might fund a capital increase of as much as €500M ($532M) in Metroweb unit Metroweb Sviluppo Srl.
- The investment would further Vodafone's multi-year effort to offer (through a mixture of acquisitions, investments, and partnerships) mobile/wireline service bundles throughout the EU. It would also bolster an Italian unit that has seen sales fall sharply amid tough price competition and the cannibalization of voice/SMS services by Web-based offerings.
- Telecom Italia (NYSE:TI) reportedly held talks to buy a stake in Metroweb earlier this year, only to see them break down over disagreements about Metroweb's ownership structure. Bloomberg's report comes as Hutchison goes after fellow Italian carrier Wind (owned by VimpelCom).
Fri, Mar. 13, 5:29 PM
- Hutchison Whampoa's (OTCPK:HUWHY) been doing its level best to consolidate European telecoms -- by itself if need be -- but very lengthy talks over acquiring VimpelCom's (NASDAQ:VIP) Italian unit Wind Telecomunicazioni are key to cementing its foothold in the continent.
- Hutchison's 3 Italia is the smallest player of Italy's four, with Wind being the third-largest. If the two (finally) merge, they'd have about a third of the market, roughly equal to that of leader Telecom Italia (NYSE:TI) and Vodafone (NASDAQ:VOD).
- Hong Kong-based Hutchison is pushing a $15B takeover of British firm O2 from Telefonica, and has already acquired Orange Austria and O2 Ireland.
- Talks between Hutchison and Wind have been going on for over a year, but in the meantime, Wind's lost customers and gained debt (its net debt is now nearly 5x 2014 EBITDA).
- Previously: FT: VimpelCom, Hutchison again close to closure on Italy merger (Mar. 10 2015)
- Previously: VimpelCom, Hutchison reportedly closer to merging Italy operations (Feb. 17 2015)
Tue, Mar. 10, 9:10 PM
- It's a headline you've heard a few times before, but VimpelCom (VIP +1.7%) and Hutchison Whampoa (OTCPK:HUWHY -1.2%) are in the advanced stages of merging their Italian units, the Financial Times reports.
- For more than a year, the two firms have been discussing how to merge VimpelCom's Wind Telecomunicazioni and Hutchison's Three Italia, the third- and fourth-largest of four competitors in Italy. But a breakthrough may mean Hutchison might get a 51% share of the combination and finally bring it to closure.
- Sound familiar? In a four-competitor market, the smallest two have launched a damaging price war that's pressured everyone in the market. If the two merge, they'd have about a third of the space, roughly equal to that of Telecom Italia (TI -3.4%) and of Vodafone (VOD -1.7%).
- Previously: VimpelCom, Hutchison reportedly closer to merging Italy operations (Feb. 17 2015)
Wed, Feb. 4, 9:36 PM
- BT Group (NYSE:BT) has reportedly put the finishing touches on its £12.5B purchase of EE, the UK's largest mobile operator.
- EE's joint-venture partners each get their piece of the deal: Deutsche Telekom (OTCQX:DTEGY) will get a board slot and 12% stake in BT, and Orange SA (NYSE:ORAN) gets more cash and a 4% BT stake.
- The pressure's now on Vodafone (NASDAQ:VOD), who recently abandoned an effort to get BT broken up and now must try a square-one entry into the British broadband market even as competitors are consolidating (Hutchison Whampoa plans a £10.25B buyout of O2).
- Vodafone will likely pursue forcing the now-giant BT/EE to sell spectrum. “Whatever the regulatory approach it is crucially important that all providers must be able to compete effectively with a combined BT-EE," says a Vodafone spokesman.
- Previously: BT Group profits up; pensions weighing on firm (Jan. 30 2015)
Thu, Jan. 22, 5:20 PM
- The FT reports Telefonica (NYSE:TEF) is "poised to agree a cash deal of more than £10bn ($15B)" to sell British mobile carrier O2 to Hutchison Whampoa, owner of rival carrier Three. A deal could be announced "as early as Friday morning."
- The paper notes the deal would create the U.K.'s largest mobile carrier, claiming 31M+ subs and a 41% market share. EE, which BT is in talks to acquire from Orange (NYSE:ORAN) and Deutsche Telekom (OTCQX:DTEGY), claims a 32% share, and Vodafone (NASDAQ:VOD) a 24% share.
- U.K. telecom regulator is bound to closely scrutinize a sale, given its historical preference for wanting four mobile carriers and Three's history of aggressive pricing.
- Telefonica/Hutchison reportedly are looking to argue BT, which (like Vodafone) is looking to offer quad-play bundles, is "already changing the boundaries of how telecoms should be judged alongside TV and broadband services." The FT states regulators are likely to push for O2/Three to sell some of its spectrum for use by MVNOs such as TalkTalk, Tesco Mobile, and Virgin Media.
- TEF +0.6% AH. An O2 sale would further Telefonica's efforts to lower its huge debt load. The carrier's net debt stood at €41.2B ($46.8B) as of September.
- Previously: Hutchison in talks for O2 mobile network
- Update: Hutchison says it's in "exclusive talks" to buy O2 from Telefonica for over £10B. Telefonica has confirmed.
Dec. 3, 2014, 1:59 PM
- During a meeting with analysts and investors, Vodafone (VOD -1%) tried to "calm fears" it could push for a merger with Liberty Global (LBTYA -1.1%), Reuters reports after talking with some of those present.
- Analyst Nick Delfas, one of the attendees: "Vodafone is highly rational about M&A and does not need to do anything. We don't think they would look at Sky or TalkTalk either." He adds some of Liberty's assets might not appeal to Vodafone.
- Bloomberg reported last week Vodafone is exploring a merger with Liberty, as it pushes ahead with its efforts to offer triple and quad-play packages to consumers in the U.K. and other European markets.
Dec. 1, 2014, 1:17 PM
- The Telegraph reports Vodafone (VOD -2.4%) is looking to buy U.K. retailer Tesco's Blinkbox VOD streaming service. A source states a deal is close, and that Vodafone isn't expected to pay much for the business.
- Blinkbox, which charges a per-rental fee, has faced competition from both rival VOD services and Netflix/Amazon's subscription streaming offerings. It lost £18.5M during its most recent fiscal year.
- Blinkbox would strengthen Vodafone's nascent U.K. pay-TV and wireline broadband efforts. The Telegraph's report follows one from Bloomberg stating Vodafone is exploring a merger with cable giant Liberty Global. Liberty respectively claims 3.7M and 4.5M U.K. TV and broadband subs through its Virgin Media unit.
Nov. 28, 2014, 1:49 PM
- Sources tell Bloomberg Vodafone (NASDAQ:VOD) is "holding internal deliberations and analyzing the financial and regulatory hurdles as well as investor support for a share-based transaction" with Liberty Global (NASDAQ:LBTYA).
- However, they add no formal talks with Liberty are currently underway, and that "valuation and regulatory issues remain key obstacles."
- Liberty has a ~$38B market cap, and $40.1B in net debt. Vodafone is worth $95.1B, and has $34B in net debt. Vodafone closed up 2.5% (with the help of a UBS upgrade), and Liberty closed up 7.4%.
- Prior coverage
Nov. 28, 2014, 1:07 PM
- Bloomberg reports Vodafone (VOD +2.6%) is exploring a "combination" with European cable giant Liberty Global (LBTYA +7.4%). Liberty has soared on the news.
- Liberty operates in 14 countries (12 in Europe), passes 52M homes, and claims 27M customers and trailing annual revenue of $20B. Vodafone has already acquired Spanish and German cable giants ONO and Kabel Deutschland, and has declared it wants to offer mobile/wireline bundles throughout Europe.
- Earlier: UBS upgrades Vodafone
Oct. 16, 2014, 4:02 PM
- The South African government is weighing a sale of its 13.9% stake in Vodafone's (VOD -0.5%) African Vodacom unit, Bloomberg reports. Vodafone, hungry for acquisitions since receiving its Verizon Wireless windfall, currently has a 65% stake and is viewed as a potential buyer.
- Bloomberg adds the government's stake is valued at $2.3B. Vodacom had 68.4M subs (92.7% prepaid) spread out over various African markets at the end of June. Its organic service revenue was flat Y/Y in calendar Q2 thanks to South African termination fee cuts.
- Last year, Vodacom bought South African wireline carrier Neotel for R7B ($635M).
Oct. 8, 2014, 3:48 AM
- Telecom operator Swisscom (OTCPK:SCMWY) is considering a sale of its Italian broadband firm Fastweb, which has been previously targeted by Vodafone (NASDAQ:VOD).
- Swisscom acquired Fastweb for €4.2B in 2007, and has so far been unwilling to sell the company. The broadband company could be worth up to €5B ($6.3B) based on 2013 EBITDA of 620M Swiss francs.
- A source tells Reuters that while Vodafone is not currently in talks with Swisscom, it remains interested in a Fastweb acquisition.
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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