Report: Vodafone would accept rating hit as price of M&A

Vodafone said it would be willing to accept a lower debt rating if a good merger or acquisition opportunity arose--a statement that analysts said signals the operator is under no pressure to sell its 45 per cent stake in Verizon Wireless.

This backs up previous comments made by CEO Vittorio Colao, who stated last month that Vodafone did not need to sell its stake in its U.S. joint venture to fund any investments in Europe, despite falling revenues in the region.

According to Bloomberg, which cited a summary of comments made in a meeting, Vodafone CFO Andy Halford said the company would take a BBB+ rating should an opportunity to make an acquisition arise. This rating is the third-lowest investment grade and one step below the company's A- ranking by Standar & Poor's.

Robin Bienenstock, an analyst at Sanford C. Bernstein, said the amount of debt required to move to a BBB+ rating may be £7 billion (€8.16 billion) or more and could finance a bid for Kabel Deutschland. Vodafone is reportedly interested in buying the German fixed-line operator to ramp up its efforts to combine offers of voice, Internet and mobile services across Europe.

Citing comments made last month by unnamed sources familiar with the matter, Bloomberg said the operator put its plans to approach Kabel Deutschland on hold after leaks of a potential offer. Kabel Deutschland is valued by the market at €6.2 billion.

For more:
- see this Bloomberg article

Related Articles:
Vodafone shares jump on report of Verizon desire to resolve JV status
Vodafone's Colao: We don't need to sell Verizon stake to bolster European markets
Report: Kabel Deutschland will not oppose Vodafone takeover
Vodafone's Q3 torpedoed by European weakness
Report: Vodafone could make bid for Kabel Deutschland within days
Report: Vodafone preps takeover of giant cable operator Kabel Deutschland

Suggested Articles

Sprint said it will offer discounted service to customers age 55 and above.

Unlimited data plans placed a strain on carrier networks last year, but according to OpenSignal the carriers met the challenge.

Verizon plans to bring 5G to four U.S. cities this year and hopes to have standards-based equipment in place for some of those deployments.