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£6bn wiped off Vodafone as AT&T puts its bid on hold

But the US telecoms group is hanging on the telephone - it's only agreed not to bid for the next six months.

by Emma Haslett
Last Updated: 06 Feb 2014

For many moons now, the rumour has been doing the rounds that AT&T, the giant US telecoms group, is going to try to buy Vodafone, the less-giant-than-it-was UK telecoms group. Eventually, things go so frenzied that the UK Takeover Panel asked AT&T to clarify its position – and this morning the company dealt the crushing blow that it isn’t planning to buy the company. At least not for the next six months.

Cue shareholders venting their frustration by going on a selling spree, causing shares to fall by 5.7% to 219p – which has wiped £6bn off Vodafone’s value. Ouch. If AT&T did make an approach, analysts reckon the mobile operator would be valued at about £60bn (er, £54bn at the moment…).

Why all the speculation? Two things: firstly, Vodafone sold its $130bn (£79bn) stake in US telecoms group Verizon last year (the deal will complete at the end of next month, shareholders are expected to benefit to the tune of £54bn), making it a smaller and more palateable mouthful for another company to acquire.

Secondly, AT&T has been in talks with European regulators about expanding outside the US. Vodafone would be a match made in heaven for AT&T: it has a presence in the UK, Germany, Italy, Spain and Turkey. It would be like buying Europe in a box.

And yet, and yet. In a rather pithy statement this morning the US firm said it ‘notes the recent… movement in the share price of Vodafone’ and ‘does not intend to make an offer’.

And while the likelihood is that, once the six months are up, AT&T will begin to sniff around Vodafone again, we can’t be sure. The FT reported last week that it has also showed interest in Spanish cable company Ono (which is also considering an IPO). And Vodafone is apparently considering a tie-up with Italian firm Fastweb. You never can tell with this telecoms lot…

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