Hello to the City’s new watchdog, the Financial Conduct Authority. It may seem rude to make requests on your first working day but there’s a market rumour on which we would like some clarity. It involves what would be the biggest M&A deal ever, and it’s on your patch. Read more
Bad news for just about every British pension holder on Tuesday morning as Vodafone shares fell 4.5 per cent following a set of disappointing first half results. Although the interim dividend was raised by seven per cent year-on-year, so shareholders are getting a bit of a sweetener but it’s not enough.
The company also said it would use $1.5bn of its $3.8bn cash dividend from its 45 per cent stake in Verizon Wireless on a share buy-back programme. Read more
To the tune of 38p a share (the shares closed 2p lower at 32p on Friday):
Ÿ Vodafone Europe B.V. (“Vodafone”) and Cable & Wireless Worldwide plc (“CWW” or the “Company”) are pleased to announce that they have reached agreement on the terms of a recommended cash offer pursuant to which Vodafone will acquire the entire issued and to be issued ordinary share capital of CWW. It is intended that the Offer will be effected by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act. Read more
A major telecom company said it was in the early stages of thinking about euthanising a corporate basket-case on Monday.
Cable & Wireless Worldwide shares were up 28 per cent at pixel time: Read more
Vodafone is set to abandon attempts to merge its Greek business with rival Wind Hellas in the face of concerns among regulators about the precedent being set by allowing a duopoly in a European mobile market, says the FT. Vodafone’s Greek subsidiary and Wind Hellas had announced plans in September to pursue a merger to create a more competitive position in the difficult economic conditions in the country. Vodafone is the second-largest operator in Greece, ahead of Wind, but both are about half the size of Cosmote, the state-backed market leader. Vodafone took a £450m impairment loss on its Greek unit last quarter. Read more
Verizon Communications has dashed the hopes of Vodafone investors by ruling out a return to a recurring dividend from the two companies’ US mobile phone joint venture, Verizon Wireless. Lowell McAdam, Verizon’s new chief executive, told the FT it was not possible to have a policy of annual dividend payments by Verizon Wireless because the leading US mobile operator may need to buy rival businesses or purchase radio spectrum. However, he sought to draw a line under long-standing tensions between the two companies, saying they were working closely together on several projects, and did not rule out the possibility of a merger. Read more
Verizon Wireless will pay a long-awaited dividend of $10bn to its US joint venture partner, the UK’s Vodafone next January, the FT says. Verizon Communications, which owns 55 per cent of Verizon Wireless,had blocked dividend payments by the mobile operator in 2005, a move widely seen as an attempt to squeeze Vodafone out of the joint venture. Verizon Communications will receive $5.5bn and Vodafone will get $4.5bn. The move is also likely to forestall major changes to the two companies’ relationship, such as a merger or a buyout of Vodafone’s stake, the WSJ reports. Read more
Verizon Communications has agreed that Verizon Wireless, its US mobile phone joint venture with the UK’s Vodafone, will pay a long-awaited dividend of $10bn next January, the FT reports. It will be the first dividend from Verizon Wireless since 2005, and Vodafone said that it would respond by making a special £2bn ($3bn) pay-out to its shareholders next February. The Telegraph says decision vindicates Vodafone chief executive Vittorio Colao’s determination to keep the Verizon Wireless stake, despite a policy of selling off non-controlling holdings.
Squeezed consumer spending, increased competition and deeper discounts have forced Vodafone to take a full-year impairment charge of more than £6bn, almost half of which came from its troubled Spanish division, the FT reports. The world’s biggest mobile operator by revenue on Tuesday said the economic woes afflicting several southern European countries including Spain, Portugal, Greece and Italy, had pushed down full-year revenues from the continent by 3.4 per cent to £30bn. However, a strong performance from its Africa, Middle East and Asia Pacific operations – which reported revenues up by a fifth to £12.3bn – enabled the telecommunications group to boost total turnover by 3.2 per cent to £45.9bn. Read more
Vodafone’s full year results are expected to be published alongside a cautious outlook pointing to squeezed consumer spending, regulatory cuts and increasing competition, reports Reuters. The world’s biggest mobile operator by revenue is aware that major rivals have suffered from intensifying competition in northern Europe, regulatory cuts, and ongoing economic difficulties in southern Europe. Analysts expect full-year revenues to hit 45.45 billion pounds, up 2.2 percent. Read more
Vittorio Colao, chief executive of Vodafone, said the UK-based mobile phone operator would consider listing its Indian business if it won a long-running legal battle with Indian authorities over a $2.6bn tax bill, reports the FT. Tax authorities in the country have ordered Vodafone to pay $2.5bn in back taxes for its $11bn acquisition of Hutchison Whampoa’s 67 per cent stake in a domestic mobile operator that it completed three years ago. Read more
Vodafone shares rose on Monday morning after the UK mobile phone group agreed to sell the remaining 44% of SFR, France’s second-largest mobile phone company, for €7.95bn (£7.02bn) to Vivendi, Europe’s largest publicly listed media company, which already owns 56% of SFR, reports the FT. Vodafone is “rather better at dismantling its empire than it was building it”, says Lex. But for CEO Vittorio Colao, says TheSource, the deal is a clear message to investors about “how serious he is about getting the telecom giant’s house in order”. The WSJ meanwhile posts Dealogic’s profile of the deal. Read more
Vodafone shares rose on Monday morning after the UK mobile phone group agreed to sell a 44 per cent of SFR, France’s second-largest mobile phone company, for €7.95bn (£7.02bn) to Vivendi, reports the FT. Jean Bernard Lévy, Vivendi’s chief executive, said the increase in profits that would result from the deal, subject to completion, would allow the group to raise the dividend for shareholders of Europe’s largest publicly listed media company and already owner of 56 per cent of SFR. Read more
Vivendi has struck a deal with Vodafone to pay €7.95bn (£7.02bn) for the 44 per cent of SFR, France’s second-largest mobile phone company, it does not already own, reports the FT. Jean Bernard Lévy, Vivendi’s chief executive, said the deal would allow Europe’s largest listed media company to raise its dividend for shareholders. Vivendi said the €7.75bn price reflected a valuation of 6.2 times SFR’s 2010 pretax earnings. In addition, Vivendi will pay Vodafone €200m to reflect SFR’s extra cash generation between January and July this year. Vodafone CEO Vittorio Colao has been reducing the company’s portfolio by selling minority stakes in Chinese and Japanese mobile operators. The SFR deal would be the biggest disposal to date. One analyst told Bloomberg that for Vodafone, the price is “much better than most people expected”. NYT DealBook notes Vivendi was advised by Rothschild and Vodafone by Lazard. Read more
Vivendi has struck a deal with Vodafone to pay €7.95bn (£7.02bn) for the 44% of SFR, France’s second-largest mobile phone company, it does not already own, reports the FT. Jean Bernard Lévy, Vivendi’s chief executive, said the deal would allow Europe’s largest listed media company to raise its dividend for shareholders. Vivendi said the €7.75bn price reflected a valuation of 6.2 times SFR’s 2010 pretax earnings. In addition, Vivendi will pay Vodafone €200m to reflect SFR’s extra cash generation between January and July this year. Vittorio Colao, Vodafone’s chief executive, has been reducing the company’s portfolio by selling minority stakes in Chinese and Japanese mobile operators. The SFR deal would be the biggest disposal to date. One analyst told Bloomberg that for Vodafone, the price is “much better than most people expected”. DealBook notes Vivendi was advised by Rothschild and Vodafone by Lazard. Read more
Vodafone is to pay $5bn to buy the Essar conglomerate out of the UK mobile phone group’s Indian business, reports the FT. Vodafone said that put and call options were being exercised, under which Essar would sell its 33% stake in Vodafone Essar, the UK group’s Indian business, for $5bn cash. The deal should resolve an increasingly acrimonious dispute between Vodafone and Essar over how to value the Indian conglomerate’s minority stake in Vodafone Essar. In 2007 Vodafone bought a 67% controlling interest in what was then Hutchison Essar for $10.9bn. It was then renamed Vodafone Essar. Indian authorities meanwhile are pursuing Vodafone for $2.5bn in tax they insist is due on the 2007 deal. Read more
Vivendi is unwilling to pay Vodafone much more than £6bn ($9.6bn) for its minority stake in SFR, France’s second-largest mobile phone operator, reports the FT. Vivendi and Vodafone have begun talks about a proposal for the French media and telecoms group to buy the UK mobile operator out of SFR. But people close to the talks said Vivendi was reluctant to pay much more than £6bn for Vodafone’s 44% stake in SFR. Vivendi owns the remainder of SFR, and some analysts said the opening £6bn gambit for Vodafone’s stake underlined the French group’s hold on the negotiations. Given SFR has just two shareholders, Vivendi is the only likely buyer for Vodafone’s stake. If Vivendi paid £6bn for the stake, it would imply an enterprise value of €20.9bn ($29bn) for SFR, or 5.5 times the French mobile operator’s 2011 pretax earnings, said analysts. Read more
Shares in TalkTalk Telecom Group, Britain’s second-biggest broadband provider, are sharply higher on Thursday morning.
Vodafone’s Indian adventure is in serious danger of turning into a nightmare, the FT reports. The UK group’s 2007 deal to secure control of one of India’s fast-growing mobile phone operators for $10.9bn was billed as a defining acquisition for Arun Sarin, Vodafone’s former chief executive. But India has turned into an expensive and highly unpredictable project for Vittorio Colao, Mr Sarin’s successor. The Indian authorities are pursuing Vodafone for $2.5bn (£1.6bn) in tax that they maintain is due on the 2007 deal. Senior government officials have also said Vodafone might have to pay $1bn in retrospective radio spectrum fees. Read more
Indian and foreign phone companies could be forced to pay more than $1bn each to the New Delhi government after a critical audit of a controversial allocation of mobile licences, two senior government officials have told the FT. The comments underline the extent of the likely commercial fall-out from growing anger over the alleged undervaluation of second-generation mobile licences awarded in 2008. The scandal, which arose around an audit of the licence process, has already forced the resignation of one telecoms minister and cast gloom over Western investment in Indian telecoms, including by Vodafone. Read more
Indian and foreign phone companies could be forced to pay more than $1bn each to the New Delhi government after a critical audit of a controversial allocation of mobile licences, two senior government officials said, writes the FT. The comments by the officials to the Financial Times underline the extent of the likely commercial fall-out from growing anger over the alleged undervaluation of second-generation mobile licences awarded in 2008. The scandal has already forced the resignation of Andimuthu Raja as telecoms minister. The report by India’s national auditor concluded that the country’s telecoms ministry allotted spectrum to existing operators – Bharti Airtel, BSNL and Vodafone – beyond the contracted limit without imposing any upfront charges. The Comptroller and Auditor General of India claimed that the bids involving these three companies cost the government an estimated $8bn in missed revenues. The risk that Vodafone could have to pay $1bn for 2G spectrum underlines how the UK group’s investment in India is rapidly turning sour. Read more
Vodafone has been ordered to pay Rs25bn ($553m) to India’s top court while the mobile phone operator challenges a long-standing dispute with the country’s tax authorities related to its $11bn acquisition of a domestic operator in 2007, the FT reports. The Supreme Court also ordered Vodafone to submit bank guarantees, worth Rs85bn, within eight weeks that would cover the outstanding portion of the $2.5bn claim made by the Indian tax authorities last month. Vodafone has been asked to pay Rs112.18bn by the Indian tax authorities in back taxes for its acquisition of a 67 per cent stake in Hutchison Essar, now known as Vodafone Essar, from Hutchison Whampoa of Hong Kong in 2007. The Supreme Court on Monday adjourned the case until February 24 2011. Vodafone said the deposit would returned in full with interest if the court finds in favour of the telecoms group. Read more
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