Vodafone has done well for its shareholders following the sale of its 45 per cent stake in Verizon Wireless for $130 billion (€94.6 billion) reports financial newspaper Barron's, and is now a good play for U.S. investors seeking exposure to European telecoms.
"Vodafone is a bet on an upturn in Europe, improving conditions in the European wireless market, and the rollout of next-generation 4G data services, which are more prevalent [in the U.S.]," Barron's said, noting that U.S.-listed American depository receipts (ADRs) of Vodafone could rise by 20 per cent or more in the next year.
Vodafone's ADRs look appealing at about $36, down from a recent high of $42, amid cooling speculation that AT&T will buy the company, the financial newspaper said.
"Vodafone offers good value," Citi analyst Simon Weeden told Barron's. "The business is turning around in Europe, and we could see AT&T re-emerge" as a potential buyer.
AT&T, which has made no secret of its ambitions to invest in Europe, has recently tried to calm speculation it would buy Vodafone, which has a market value of around $100 billion. The U.S. company is also likely to have been put off by Vodafone's recent cable shopping spree, which has seen it pick up cable assets in Germany and in Spain--although the latter deal to buy Ono is still subject to regulatory approval.
In January, AT&T was forced to deny it intended to make an offer for Vodafone at the request of the UK Takeover Panel. The statement to the London Stock Exchange ruled out AT&T from buying Vodafone for six months.
For more:
- see this Barron's article (sub. req.)
- see this Reuters article
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