Is Vodafone selling its US$7.2B China Mobile stake?

As China Mobile surprised many with the announcement to replace its Chairman and CEO, of less visibility was the possibility that Vodafone could now sell its minority shareholding following the end of a lock-in period.

While Vodafone has not given any indication that it was considering the sale of its 3.3 per cent holding--valued at US$7.2 billion, financial analysts expressed their concern that such a move would hit China Mobile's share price.

"If Vodafone does sell, there's no reason for anyone to buy China Mobile's shares in the short term." said Vincent Deng, an analyst at Phillip Securities in Shanghai.

Albeit that Vodafone has seen the value of its shareholding more than double since it purchased the stake in two tranches between 2000 and 2002 for a total of $3.25 billion, worries have recently arisen over China Mobile's slowing revenues.

Last month, Vodafone said that it was re-evaluating its strategy on holding minority stakes in other operators--which would include SFR, Verizon Wireless and China Mobile. This statement triggered speculation that the company would sell or spin off its holdings, although no reports of any action has emerged.

For more on this story:
- read Reuters

Related stories:
Vodafone divestitures, including Verizon Wireless, should be pursued at sensible prices
Rumour mill: Is Vodafone about to enter Brazil?
Vodafone results boosted by data; company promises new direction
Vodafone's plans to revamp Internet services critical to future success