Boston, MA 04/10/2014 (wallstreetpr) – Vodafone Group Plc (ADR) (NASDAQ:VOD) is the third largest telecoms operator in Britain, boasting more than 19 million subscribers. The market values the operator at $98 billion.
The company recently exited the U.S. market completely following the sale of its stake in Verizon Wireless. Vodafone sold 45 percent of its Verizon Wireless holding to Verizon Communications (NYSE:VZ) in a transaction worth $130 billion. Buoyed by huge amount of cash, the company is currently expanding its branded outlets in U.K. The company is also reportedly circling smaller peers for acquisition to ensure diversification. The emergence of free mobile messaging apps such as WhatsApp is having its toll on voice and text revenue. Therefore, Vodafone is looking at diversification, mostly into mobile data service, to ensure that it keeps its revenue growing.
However, as Vodafone Group Plc (ADR) (NASDAQ:VOD) plots its future, it is also being circled for a possible takeover of its U.K. operations. In the latest case, Softbank that owns Sprint Corporation (NYSE:S) is said to be salivating for Vodafone. Softbank recently attempted to acquire T-Mobile US Inc (NYSE:TMUS), but the deal is faltering due to regulatory concerns.
Ready to pay premium
In order to take over the control of Vodafone U.K., Softbank is ready to pay $80 billion for the deal. If that happens, the transaction will make the previous deal to acquire Sprint a pale one by comparison.
Before Softbank stepped forward with interest to take over Vodafone, AT&T Inc (NYSE:T) was seen to be showing interest in Vodafone’s U.K. operations. With intense competition in the U.S. telecoms market, AT&T is looking to the European market which still looks promising especially for data business. However, AT&T investors seemed unsettled with eurozone investment given the stringent regulatory measures in the market.
Wait and see
It is not certain that Vodafone Group Plc (ADR) (NASDAQ:VOD) will agree to a takeover, however, a deal cannot be ruled out. Therefore, it remains to be seen what is going to happen in the next couple of months. Both contenders for Vodafone – AT&T and Softbank – have the financial muscle to complete what they have started.
