Vodafone shares up 6% after pulling out of bidding for US operator

SHARES in mobile phone giant Vodafone rose sharply yesterday after it said it had pulled out of the multi-billion pound auction for US operator AT&T Wireless.

The group, which is believed to have submitted a bid worth £18 billion, said it withdrew from the race this morning after deciding it was no longer in the interest of shareholders.

Vodafone had been locked in the bidding war with US rival Cingular after first revealing its interest in AT&T last week.

The news was greeted with relief in the City, which feared the group was overpaying for the company, with shares rising more than 6%.

A statement to the London Stock Exchange said: "Vodafone remains committed to its existing position in the US market with its successful partnership in Verizon Wireless."

The board of AT&T, which announced the company was up for sale three weeks ago, following a string of poor results, reportedly met last night to discuss the bids.

Vodafone and Cingular were thought to have made offers of $35 billion (£18.4 billion) at the weekend and then returned with revised bids.

Vodafone is understood to have made a final offer of $38 billion (£20 billion) for the third largest operator in the US a sum that Cingular was expected to match.

Analysts had voiced concerns about the takeover as it would force Vodafone to give up a profitable stake in US firm Verizon Wireless.

They also criticised the "poker tactics" of the company in refusing to confirm officially that it had made a bid.

Cingular a joint venture owned by SBC Communications and BellSouth would generate cost savings from overlaps with its existing business. But market watchers said Vodafone was unlikely to reap similar benefits and was pursuing a bid because it wanted direct control of a US operator rather than a minority stake.

Japanese firm NTT DoCoMo pulled out of the bidding on Friday.