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Vodafone Group Plc Message Board

  • eyt_trub eyt_trub Nov 5, 2013 10:28 PM Flag

    Yo Scotty

    You will have no need for Viagra after you web search and read an article appearing in Daily Tech which is titled "AT&T Explores $100B+ USD Deal to Acquire Vodafone's European Operations".

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    • "Total deal could reach $175B USD, China Mobile, America Movil, and Orange would buy up local Vodafone units"

      Fair article. Would place near a 30% premium on fair valuation indicated by Einhorn of ~$27 for VOD stub ex the special divy. $27 + 30%= 35.10 [or ~172B] 35+17=52 and at the top end of my long stated $47-52 range. T has had a long time to look at the deal. Pretty sound assumption given VZ paid a premium in similar percentage. Don't see why Colao and BOD would settle for less.

      $52 has been the top end for a long stretch now BUT the net to shareholders could trickle higher if VZ shares continue higher, T shares offered in a deal move higher above any collar, and USD/GBP currency trade move in favor of a weaker USD/stronger GBP. Need trade another buck or two higher here to make the setup.

      Sentiment: Strong Buy

      • 1 Reply to smalls_62
      • "Extrapolating, at its current market cap a deal for Vodafone could reach roughly $175B USD -- or more. AT&T would likely wind up paying at least $100B USD of that for Vodafone's EU units."

        "AT LEAST 100B for EU units".... Note +100B for the EUROPEAN UNION units which would mean additional value for the emerging markets assets (+/-75B) PLUS the 84B still in share price on VZW special divy to be paid. This article essentially indicates the 250-255p would be WITHOUT VZW special divy money in the bid figure.

        For quick reference I will cut and past old valuation per Saltshaker post for emerging markets assets:

        $20 billion Vodafone India (value based on recent media articles)
        $11 billion 65% of Vodacom (publicly traded market value)
        $2.4 billion 54.9% of Vodafone Egypt (based on recent media articles)
        $1.8 billion 40% of Safaricom (publicly traded market value)
        $1 billion 70% of Ghana Telecom (estimate based on 2008 sale price)
        $1.0 billion 4.4% of Bharti Airtel (publicly traded market value)
        $0.5 billion 23% of Vodafone Qatar (publicly traded market value)
        $1 billion 50% of Vodafone Australia (conservative estimate)
        $1 billion Vodafone New Zealand (conservative estimate including 100% of Telstra Clear)

        Saltshaker's 40B valuation is "conservative" but lets add emerging market takeover premium of just 30% [40% might be more appropriate for growth] and we get a takeover price of 52B for emerging. I will note the EBITDA multiple for VOD India is a couple turns lower than its two biggest peers in India so 52B is indeed low/conservative. ++100B EU assets only + 52B EU per Saltshaker + 84B VZW special divy. The minimum would be 236B or +$48 using Saltshakers conservative emerging market values coupled with the Daily Tech articles minimum for the EU assets alone. Add two turns for India EBITDA and a little variance for EU and we are stairing at $52 NET to shareholders.

        Sentiment: Strong Buy

    • Very interesting. . . AT&T pays an easily digestible $100 billion for the European operations, China Mobile takes India, Orange takes Vodacom and America Movil takes the rest . . . bare minimum $45/share before the VZW distribution

      Sentiment: Strong Buy

    • nigeco Nov 6, 2013 4:57 AM Flag

      eyt_trub, thanks for posting, very good read.

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