Vodafone moves to take sole control of European assets

14 Jan 2003

UK-based mobile giant Vodafone has revealed that it is in talks to purchase the outstanding shares in its subsidiaries in the Netherlands, Portugal and Sweden, a move that will cost the operator up to EUR2 billion. Vodafone has suggested that it will formally bid EUR11 per share of Dutch cellco Libertel, EUR8.5 per Telecel share in Portugal and SEK45 (EUR4.9) per share in Sweden’s Europolitan, although shares in all three climbed above these levels when the news of the manoeuvre broke. As it stands, Vodafone owns 77.6% of Libertel (up from 70% since it began the buy-back), 61.4% of Telecel and 74.7% of Europolitan (up from 74.4%); all three have recently been renamed Vodafone in line with the parent company’s branding strategy. Vodafone has the right to acquire all minority shares in its local subsidiaries once it has taken its holding to above 90% or 95%, depending on the terms of its ownership of each. The company claims that the purchases will be ‘earnings enhancing’. As it already has control of these assets its move is not being viewed as aggressive by the industry, indeed shareholders are expected to benefit financially, with analysts predicting that Vodafone could raise its offer price by as much as a third and still broker an earnings enhancing deal. It remains to be seen, however, whether Vodafone will have to raise its offer, although the fact that the subsidiaries in question were trading above their offer prices yesterday will certainly give local investors hope. According to sources at Vodafone, the company has no plans to bid for the outstanding shares in Greek unit Panafon – in which it upped its stake to 63% at the end of November – nor does it aim to take sole control of 66.7%-owned subsidiary Japan Telecom.