Vodafone put on 1.45p to 202.6p amid red hot speculation that advisers of AT&T are now working around the clock on a cash bid worth more than £3 a share for the UK mobile phone giant, which is currently capitalised at around £53billion.
After intense speculation in January, the second largest US mobile operator was forced to say that it didn’t plan to make a bid for Vodafone. That meant it could not offer to buy Vodafone or a stake of 30 per cent or more in the company for six months.
AT&T has been allowed to make a move since late July and the weak performance of the Vodafone share price has persuaded the board to set the wheels in motion. AT&T has been looking in Europe for growth as its home market becomes more competitive. An acquisition of Vodafone would mean AT&T taking over Europe’s biggest wireless carrier and creating the world’s largest telecommunications operator by sales.
With more than 500million wireless subscribers worldwide, the combined company would be able to challenge Google and Apple when negotiating handset subsidies and wringing profit out of growing technologies such as mobile advertising. It would give AT&T access to markets including the UK and Germany, with Vodafone continuing to add wireless and broadband assets in Europe.
But Vodafone has another heavyweight admirer. China Mobile, one of the world’s largest mobile phone firms, was sniffing around earlier in the year with speculation then rife that it was interested in acquiring a stake in Vodafone up to 20 per cent . The idea being to set up a joint venture to target the booming African market as the UK company has a strong presence there.
Back in January it would have had to pay close to £3 a share, but now a bid of around 220p a share would probably see it trouser a strategic stake. Should AT&T launch a full bid, the state-backed Chinese group could definitely have something to say about it.
Vodafone has been seen as a takeover target ever since chief executive Vittorio Colao agreed to sell the company’s 45 per cent stake in Verizon Wireless to Verizon for £70billion in September 2013.