VOD Stock – Vodafone Shares Slump on AT&T No-Go

by Burke Speaker | January 27, 2014 8:53 am

VOD Stock – Vodafone Shares Slump on AT&T No-Go

Shares of Vodafone (VOD[1]) VOD stock fell to the lowest levels in five years following word from AT&T (T[2]) that it would not be buying the company.

Vodafone185 VOD Stock   Vodafone Shares Slump on AT&T No Go[3]Vodafone fell 7.2%, the biggest drop since 2008, before regaining some of the loss. Shares are up 53% from last year.

AT&T will not be allowed to offer to buy Vodafone for the next six months, according to UK rules governing such takeovers. AT&T made the announcement after a request of the U.K. takeover panel. (via Bloomberg[4])

Executives of Dallas-based AT&T were laying the groundwork internally for a potential acquisition of Vodafone this year, people with knowledge of the matter told Bloomberg News. While AT&T is now ruling out an immediate offer for Vodafone, with a market value of $177 billion before a sale of its U.S. venture is completed, it could make a bid later on, said Simon Weeden, an analyst at Citigroup Inc. inLondon[5].

“The move could indicate that AT&T is either uninterested altogether or merely unprepared to start a process today given time constraints,” Weeden said in a note to clients.

Analysts in the past have estimated that Vodafone could be worth about $130 billion to an acquirer after it sells its stake in U.S. carrier Verizon Wireless to partner Verizon.

While AT&T is looking to Europe in its expansion plans, the decision to pass on a VOD buyout means it’s allowed to wait to see how the company projects its finances for the next year.

T stock is up less than a percent in pre-market trading.

Endnotes:
  1. VOD: http://studio-5.financialcontent.com/investplace/quote?Symbol=VOD
  2. T: http://studio-5.financialcontent.com/investplace/quote?Symbol=T
  3. [Image]: http://investorplace.com/wp-content/uploads/2013/11/Vodafone185.jpg
  4. via Bloomberg: http://www.bloomberg.com/news/2014-01-27/at-t-says-it-has-no-plan-to-make-takeover-offer-for-vodafone.html
  5. London: http://topics.bloomberg.com/london/

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