Vodafone brings in a new chairman experienced in restructuring

With Vodafone expected to announce a continued improvement in its quarterly results Thursday, financial analysts at RBS already believe the company's shares are trading at a high premium to its large-cap peers.

As reported by Sharecast, RBS claims that the company is rated more like a growth stock, with its shares priced at a premium of about 24 per cent to the sector.

"We believe Vodafone is still priced beyond perfection," said RBS, which ventured that the company would report that Spain and Italy continue to register negative organic service revenue growth for the second quarter in a row, at -7.2 per cent and--1.2 per cent respectively. However, the banking group also thought that Vodafone's Indian's operations could benefit from strong revenue growth - over 15 per cent in the third quarter--and gain over eight million new customers in the quarter.

But the appointment of outgoing Philips CEO Gerard Kleisterlee as the new chairman of Vodafone has been welcomed by the market, helping to push up the company's share price by 0.6 per cent.

While nothing has been said about how German-born Kleisterlee will work with Vodafone's board, he has been credited with transforming and simplifying the previously unwieldy Philips conglomerate since he was appointed CEO in 2001.

"His track record is very good," Execution Noble analyst Will Draper told Reuters. "He's combined a good strategic repositioning at Philips with a really good operational performance and quite clever, selective M&A where required. But he's not a gung-ho dealmaker at all. It's been incremental and about the need to reposition the group."

Speaking to Bloomberg, Corne van Zeijl of SNS Asset Management, said: "Vodafone has some of the same problems which Philips used to have," adding that Vodafone needs to deal with minority holdings it can't control, including a 45 per cent stake in Verizon Wireless. "I think that's the main reason why Kleisterlee has been picked."

For more:
- see this Sharecast article
- see this Reuters article
- see this Bloomberg article

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