Emirates State-Backed Telecom Firm Scoops Stake In Vodafone For $4.4B; Continues To Fuel Takeover Concerns

  • Emirates state-backed telecom firm e& acquired a 9.8% stake in Vodafone Group Plc VODBloomberg reports.
  •  Emirates Telecommunications Group Company PJSC , now known as e& bought a $4.4 billion stake offering 130 pence ($1.59) a share
  • Vodafone CEO Nick Read is trying to consolidate in key markets amid pressure from shareholders.
  • Also Read: Vodafone Receives Takeover Bids For Vantage Towers: Reuters
  • A wealthy, supportive shareholder could give Read cover to reset expectations around investment and profits by supporting the share price, Jefferies analyst Jerry Dellis said. 
  • The move could give Read more incredible cover to spend upgrading its network like Vodafone’s cable footprint in Germany to fiber. 
  • “We expect e& to counteract activist pressure, not add to it,” Dellis said. 
  • He noted that e&’s CEO Hatem Dowidar previously worked at Vodafone for 17 years, including Read. 
  • e&’s arrival may trigger new takeover concerns for Vodafone’s board, which recently added three directors with telecom, technology, and regulator experience. 
  • After e&’s standstill expires, its controlling shareholder, the UAE state, could easily find a way to fund a complete acquisition, said New Street Research analyst James Ratzer. 
  • The takeover could face political investigation by the UK, Ratzer added. 
  • Price Action: VOD shares traded higher by 2.94% at $15.06 in the premarket on the last check Monday.
  • Photo via Wikimedia Commons
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