Liberty Global grabs Vodafone stake - Mobile World Live

Liberty Global grabs Vodafone stake

13 FEB 2023
Vodafone

Liberty Global CEO Mike Fries backed Vodafone Group’s long term potential, as his company announced the purchase of almost 5 per cent of the multinational operator’s shares.

In a stock market statement, Liberty Global noted the purchase had been largely funded through financing. The buy comprises 4.92 per cent of the operator group’s shares, not including treasury shares.

The investor noted it did not intend to seek a board seat and was not considering an offer for the whole of the company.

Liberty Global’s purchase comes at a time of change at Vodafone, with its latest permanent CEO Nick Read stepping down at the turn of the year, changes being implemented in its European units and various cost-saving efforts underway.

Its largest single shareholder e& has also been building its stake in Vodafone in recent months, with the UAE-based operator owning 13 per cent as of a statement made on 3 February.

Fries said Liberty Global believes “like many others, that Vodafone’s current share price does not reflect the underlying long-term value of their operating businesses, or their announced consolidation and infrastructure opportunities”.

“We continue to remain disciplined about our capital and fully expect that the equity used to fund this investment will be replenished with the sale of certain non-core assets over time.”

Liberty Global holds various telecoms interests in Europe, including owning Swiss operator Sunrise, along with half of a joint venture with O2 in the UK under the Virgin Media O2 brand, and another JV with Vodafone in the Netherlands under VodafoneZiggo.

The companies were also involved in a huge deal in 2019, which saw Vodafone purchase a range of cable assets across Europe.

Analyst reaction
CCS Insight’s Kester Mann argued the move could be interpreted as a positive indicator for Vodafone’s planned merger with Three in the UK. “The two companies confirmed talks last October, but have kept largely silent since,” he noted in a statement to Mobile World Live.

Mann added that although today’s deal by Liberty Global appears opportunistic, it also raises questions as to what will be the US company’s next move in Europe.

“One option could be to buy Vodafone out of its 50/50 Dutch joint venture, VodafoneZiggo,” he reflected. “But CEO Mike Fries has also previously expressed interest in merging VodafoneZiggo with Belgian operator Telenet, a scenario that could become more attractive following recent positive comments from the European Union regarding pan-market consolidation.”

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Chris Donkin

Chris joined the Mobile World Live team in November 2016 having previously worked at a number of UK media outlets including Trinity Mirror, The Press Association and UK telecoms publication Mobile News. After spending 10 years in journalism, he moved...

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