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Vodafone Group Plc Message Board

  • smalls_62 smalls_62 Jul 15, 2013 7:23 PM Flag

    Here’s Why AT&T Thinks Europe Is Ripe for the Picking

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    AT&T Inc. (NYSE:T) is aiming for a European expansion, according to sources close to the telecommunication company’s executive team. Chief Executive Officer of the second-largest U.S. wireless carrier, Randall Stephenson, has allegedly directed key staff to develop an acquisition “wish list” of potential European wireless carriers, including Telefonica S.A. (NYSE:TEF) and Vodafone Group PLC (NASDAQ:VOD). According to sources, AT&T, which has a market value of $193 billion, is confident it can win European customers and increase profits by providing faster, fourth-generation networks.
    ...
    Bloomberg data indicates European telecom carriers are trading at a 36 percent discount to U.S. rivals, offering some of the world’s best takeover values.
    ...
    Last month, AT&T’s Stephenson visited European Commission Vice President Neelie Kroes, who’s in charge of devising new rules for phone companies across Europe. Kroes said she plans to create a more united telecom landscape, which so far has included eradicating roaming charges and enforcing net neutrality, but no rules to make purchasing deals simpler.

    Here is my takeaway: 1)T wants to buy VOD, 2)Hence, it will be a joint deal with VZ because of the inherent antitrust with the 45% stake in Verizon Wireless 3)36% discount puts us smack dab in the $45-$50 range& in line with 245B rumored buyout price for all of VOD 4)Stephenson already greasing the wheels for the deal. 5)Couple these points with the piece I mentioned with the research firm calling for expect the unexpected-and they nailed Leap.

    Get after it BKB. Yes, there are regulatory hurdles and Stephenson appears ready to tackle them because the EU market is ripe for cherry picking.

    Sentiment: Strong Buy

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    • According to the analyst calling for us to "expect the unexpected," there are a number of viable options for T to pursue. VOD is only one of several good possibilities!

      I reiterate my view that the regulatory hurdles are high for a VOD buyout and that protectionist politicians (both EU and each EU member country where VOD operates) will fight it. The "Snowden Effect" will one of many reasons they squeal about!

      I believe there's a good chance VZ will buy the rest of VZW. The cash will allow VOD to aggressively acquire and invest to expand and grow. While I doubt T will buy the rest of VOD, if they do, I think it'll happen after VZ completes it purchase of VZW. There is no reason for VZ to tie up or delay its deal so that T can negotiate and jump all the EU regulatory and political hurdles.

      Of course I'd love to be wrong about this because I'd book very nice profits! In other words, I can't disagree with your earlier observation: "You know you do.... ;-)"

      Still hoping to see $30 by Friday. Enjoy the evening Smalls - tomorrow's another hot summer day...

      • 3 Replies to betting_my_bundle
      • Hope you're right. But there has been some info on VZ Wireless about the commitments they made to buy IPhones from AAPL. They buy them from AAPL for $600 and sell them to their subscribers for $200. They have made multi year commitments and are behind in their final sales. Some estimates are that VZ Wireless could be on the hook to AAPL for as much as $14 billion. This could be a factor in not being able to get a deal done.

      • nigeco@mail.com nigeco Jul 16, 2013 5:24 AM Flag

        “There is no reason for VZ to tie up or delay its deal so that T can negotiate and jump all the EU regulatory and political hurdles.”

        Hi betting my bundle, I agree with your comment’s mate, IMO the only reason VZ would team up with T would be, IF it meant it would get its hands on VOD’s 45% of VW cheaper than buying directly from VOD, obviously the two cannot agree on a price, baring in mind VOD would have to pay taxes to the USA, although a full take-over of VOD would mean VOD would not have to pay the tax. Also VZ CEO did say he would go direct to the VOD shareholders if need be? I must say I enjoy reading your comments, great debate. GL all. Nige

      • (I believe there's a good chance VZ will buy the rest of VZW. The cash will allow VOD to aggressively acquire and invest to expand and grow) This presumes that vod will be willing to part with crown jewel of vzw share. vod did not part with it for long many years and i believe they will not now and they should not. sure it is a wishful thinking on vz dreamland. there is this vague idea that vod can buy other assets to use that money from vz.. vod is clever enough to realize that a bird in hand is much better than 2 in the bush.

 
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