Vodafone slips after doubts on bid prospects
By Bryce Elder
Nearly everyone expects AT&T to bid for Vodafone. According to Santander analysts, nearly everyone is probably wrong.
AT&T was reported last week to be weighing up a bid for Vodafone next year, once the group completes the sale of its Verizon Wireless stake. But the talk has “all the hallmarks of a fishing exercise to test the waters” among investors, argued Santander analyst John Davies.
“We would not get too excited just yet,” Mr Davies told clients. Vodafone’s rump “is not cheap (at more than 20 times earnings), regulation is unlikely to change materially and we do not believe there are meaningful synergies”.
Randall Stephenson, AT&T’s chief executive, has “made it clear that he believes that spectrum rules need to change for Europe to be attractive,” Santander argued. “This would include more spectrum trading, technology neutrality, harmonisation between countries and probably longer licences. We do not believe many of these are realistic possibilities.
“If AT&T is determined to dip its toe into European waters, an offer for EE would be much more sensible,” the broker said. Vodafone slipped 1.2 per cent to 227.8p.
Ha ha.....Stephenson even publicly stated the interest in VOD and this has been confirmed by the many reports of T trying to partner with VZ early in the year. What part of that is fishing vs. they were actually trying to pull the trigger on a hunt? EE has pretty much said it prefers to IPO the deal and keep the partnership between Orange and DT vs selling it.
1)The analyst needs to revisit EBITDA multiple because it isn't close to his.
2)Regulation change in the works is very significant and EU leaders gave Kroes the nod to proceed with changes just a couple weeks ago. They also indicated to Kroes they desired a direction in future spectrum alignments. This "regulation is unlikely to change materially" is laughable as the big boys are playing tennis with this equity with several false releases including the incorrect story by WSJ the Kroes agenda was pushed into at least 2015 when in fact it is still scheduled to go into effect by Easter 2014. THIS PART OF SANTANDAR COMMENTARY SHOULD TELL US ALL THAT THEY ARE BEING A SHILL AS IT IS AS SORRY WRONG. AS SORRY WRONG AS THE FAKE STORY BY DOW JONES on the Kroes agenda being delayed.
3)No Meaningful synergies ..... like accretive cash flow out the front gate of approximately 2B PLUS the piece last week spoke of T thinking the joined assets increasing buying power providing greater negotiations leverage with suppliers among other synergies.
This Santander fellow is a shill just like the sucker who printed the bad news story in the WSJ about the Kroes agenda. I don't know if this is an attempt to shake the tree or just plain keep new people away. Keep in mind:
3/14/2013 Santander Downgrade Hold
(N/A) 27.26 36.45 33.71% Details
VOD has only went skyward since this analyst downgraded. Maybe one should take Santander opinion as a contradictory indicator.
people like santander should be held liable for their malpractice and for their mistakes which border on delusions. what bothers me is that even after being wrong in black and white still they call themselves analysts and get paid for it and continue to spread their trash around.
Correction: a couple places I wrote incorrect story by WSJ when I inteded to write Dow Jones story was false. WSJ has also had a couple hit pieces as well but DJ was a ship sinker if it would have been true.