Vodafone shareholders back pricey acquisitions
Top of the list is Spain’s cable operator Ono, which would help Vodafone keep up with the growing popularity of all-included bundles of mobile to fixed-line services as well as help it carry the ever-increasing data traffic on its networks.
Vodafone shareholders have proven surprisingly unfazed by Ono’s eye-popping €7bn-plus price tag, nor do they think Colao should just sit tight and wait for a possible bid from AT&T while his European business deteriorates.
“You cannot stop running a business while you negotiate possible deals,” a top 20 shareholder in Vodafone told Reuters, when asked about the likely impact on an AT&T deal.
“Vodafone is in a weak position in Spain. Regardless of AT&T, if Vodafone wants to keep Spain it needs to put more money into capex and fix the business.”
One person, however, who does not agree with Colao’s strategy of splashing out on broadband is AT&T boss Randall Stephenson.
Stephenson, who has expressed an interest in expanding in Europe — with Vodafone tipped as the most likely target — was reported by the Wall Street Journal this week as having said that buying cable assets wasn’t what he would do, as the wireless market was a better option.
AT&T, which declined to comment on the WSJ report, said in January it would not bid for Vodafone in the next six months, after being forced to make its intentions clear by the British regulator.
One of Vodafone’s biggest 10 shareholders said AT&T would prefer not to watch Vodafone spend the proceeds of the Verizon deal, but it wouldn’t change the American company’s mind on the virtues of a takeover.
“I don’t think Vodafone’s buying would really put them (AT&T) off,” the shareholder said, on condition of anonymity.
Like its rivals, Vodafone has been hammered in its big European markets in the last five years due to fierce competition.
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