20th January 2014
Investment firm Brewin Dolphin has suggested that Vodafone could disappear from the UK market following a US or Japanese takeover.
Writing on the firm’s blog for investors, Divisional Director Nik Stanojevic suggests that a Japanese or US buyer most likely US telecoms giant AT&T could buy the firm.
Previously US ant-trust legislation prevented a move by AT&T because of its 45% stake in Verizon Wireless.
Such a move would be possible after the distribution of the Vodafone special dividend which takes place on 24th February – two thirds of which will be in Verizon Communications shares and one third in cash.
The note continues: “AT&T could be preparing to bid for Vodafone after the distribution (it is not possible before this due to antitrust). AT&T has made no secret of its international ambitions and has the balance sheet to support a bid, which would certainly also contain a large share component. A highly profitable US wireless market means that telecoms shares are trading at a premium to European listed companies. AT&T may choose to use its own highly rated shares as an acquisition currency”.
Whatever happens with AT&T, Stanojevic says that shareholders which don’t want to own Verizon shares with its US exposure (and maybe those of AT&T if it uses them to buy Vodafone) might look to Europe for similar stocks.
He suggests investors might look at Dutch firm KPM, Portugal Telecom and Telecom Italia.