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> Vodafone 'ponders $37bn US buy'
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taken from this
BBC article
Mobile phone giant Vodafone's board is reportedly putting together plans to swallow AT&T Wireless, the US' third biggest mobile player.
Vodafone bosses have until Friday to join the multi-billion dollar battle for AT&T Wireless.
They may offer $37bn (£20bn) in order to beat US rival Cingular's $30bn bid, according to UK press reports.
But Vodafone would have to ditch its 45% stake in US market leader Verizon Wireless if it buys AT&T Wireless.
The decision on whether to buy AT&T Wireless is being seen as a nail-biting one for the board, and especially for Vodafone's recently appointed chief executive Arun Sarin.
Cliff-hanger
"I don't think we'll decide till the last possible moment," the UK's Sunday Telegraph newspaper quoted a Vodafone director as saying.
"I would say the odds are 55% in favour of us going ahead," said the director.
Vodafone must weigh up the chance to increase its US presence by gaining ownership of a major player, against the risks of making a costly acquisition its shareholders seem doubtful about.
Vodafone's shares have fallen more than 6% in the last month since the prospect of a bid battle for AT&T Wireless emerged.
Risk of a shareholder row
Vodafone expanded aggressively under its last chief executive, Christopher Gent, who spearheaded its £100bn takeover of German firm Mannesmann, and shareholders are thought to want a period of consolidation.
Vodafone holds 45% of US market leader Verizon Wireless, whose technology is not compatible with Vodafone's other networks, while AT&T's is.
One problem Vodafone executives face is how to make sure they do not shed the Verizon stake, lose out to a rival for AT&T Wireless and end up without a significant US presence.
A takeover of AT&T Wireless by Cingular Wireless would mean a merger of the second and third biggest US mobile phone companies.
Other possible suitors include Japan's NTTDoCoMo, and US firm Nextel.
Vodafone is thought likely to seek to sell its Verizon Wireless stake back to Verizon Communications, the firm's parent company, for about $20bn, the Wall Street Journal reported.
Cingular is owned by SBC Communications and BellSouth.
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Posted: 2004-02-08 18:29:22
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Well I hope they buy it (Voda) as I see some large roaming benefits
And it would defnitely mean they finally get a firm foot on the ground in the US market, something they've been after for a while now
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Posted: 2004-02-08 19:23:10
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I have to say when Vodafone entered the Australian market (I was with Optus) I hated Vodafone and everytime they approached me they came across as used car salesmen. In Australia when mobile number portability became available I moved back to Telstra, the original (and previously government owned) telecoms company.
But I have been with Vodafone in UK for anumr of years and have been very happy with the service and so I wish them all the luck if they choose to take this opportunity in US.
Also, as you say, the added benefit might be better roaming capabilities because certainly around Europe its pretty fantastic Indeed I wonder if they might not be very influential in bringing GSM to a wider audience rather than just taking over the existing infrastructure.
I guess we'll see!
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Posted: 2004-02-08 19:57:02
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update on this story
I'm a little dissapointed actually...
US firm pips Vodafone in bid race
US telecoms firm Cingular has beaten UK rival Vodafone in the brief but tense battle to take over AT&T Wireless.
Cingular has agreed to pay $41bn (£22bn) for the US firm, some $3bn more than Vodafone reportedly offered.
The news sent Vodafone's shares up by 6%, amid investor relief that the firm no longer risked overpaying in its quest for US market share.
Some analysts also argued that AT&T Wireless was a closer strategic fit with Cingular than Vodafone.
The combined firm will have 46 million customers in 49 states, and annual revenues of more than $32bn.
It will overtake Verizon Wireless - in which Vodafone has a 45% stake - as the US' biggest mobile phone operator.
"This combination is expected to create customer benefits and growth prospects neither company could have achieved on its own," said Stan Sigman, the president and chief executive of Cingular.
Murky business
Details of the bidding process for AT&T Wireless are still shrouded in secrecy, although Vodafone now admits it put forward a bid on 9 February.
We can now expect Cingular / AT&T Wireless to become the consumer market powerhouse
Julian Hewitt, Ovum
What happened to Vodafone's share price
According to media reports, initial bids from both Cingular and Vodafone were rejected last week, but the firms submitted higher offers for AT&T Wireless to consider over the weekend.
With the US representing one of the few remaining sources of likely growth in the developed world, the market is crucial for firms with global ambitions.
The US mobile market is highly fragmented, and is believed to be on the brink of rapid consolidation.
Julian Hewitt at telecoms analysts Ovum, said: "We have long believed in consolidation in the US telecoms market.
"We can now expect Cingular / AT&T Wireless to become the consumer market powerhouse.
"The combined company will mean strong competition for T-Mobile, who sit uncomfortably between the two players.
"However, we expect that AT&T Wireless will continue to struggle to retain its business customers. We expect Verizon Wireless to continue to lead the business market, partly because of its new CDMA2000 high-speed data services."
Global equity strategist Patrik Schowitz at HSBC, said: "The markets think it's a good thing that Vodafone hasn't overpaid, although in the long term, of course, it does leave them with a strategic problem in the United States."
The rationale for Vodafone's AT&T bid was that success would give it control of a US network operator, which it could rebrand as Vodafone.
AT&T Wireless also uses the same mobile phone technology as Vodafone - GSM.
Vodafone's existing joint venture with Verizon gives the UK firm none of those things.
Vivendi next?
News of the AT&T deal also sparked a 5% rise in the shares of conglomerate Vivendi, which is believed likely to face a bid from Vodafone to buy it out of their French joint venture SFR.
Some analysts say Vodafone will also consider a takeover attempt for all of Vivendi, in order to secure SFR.
Japanese carrier NTT Docomo, owner of a 16% stake in AT&T Wireless, earlier decided against bidding for the rest of the company and on Tuesday said it was reviewing its options in light of the Cingular deal.
Cingular is a 60:40 joint venture between US firms SBC Communications and BellSouth.
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Posted: 2004-02-17 16:30:52
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