Financial analysts have been surprised at the price Vodafone has managed to extract from the sale to Vivendi of its 44 per cent holding in SFR. The price of €7.95 billion was, according to Barclays Capital, €566 million higher than its estimate. The long-awaited deal sees Vodafone move another step closer to revamping its portfolio as it sells minority holdings in weaker markets to achieve scale in regions with better returns.
"Vodafone has definitely got away with the better side of this deal," Morten Singleton, a London-based analyst at Investec Securities, told Bloomberg. "It is a good deal, especially as there was only one buyer of this asset."
Analysts at the investment bank group Jefferies International told MarketWatch they saw the sale as "a very positive outcome" for Vodafone, adding that the valuation reflected well on the UK firm's management - "being comfortably above the sector average despite only one buyer for the asset and above-average forecast risks facing French mobile."
Vivendi's purchase of Vodafone's SFR stake was viewed positively by the French stock market, which pushed the share price up 0.6 per cent. Commenting on the deal, its CEO, Jean-Bernard Levy, said that the acquisition of SFR would enable the company to add "in excess of €600 million" to adjusted net income each year in 2012 and 2013, Levy said on a conference call reported by Bloomberg. It "allows us to increase the dividend," he said.
Regardless of this upbeat stance, the investment firm Bernstein & Co. has estimated that Vivendi overpaid for SFR. It claims that a typical valuation for a mobile operator in a mature market is about 5.1 times to 5.3 times 2010 EBITDA, whereas the purchase of SFR values it at 6.2 times its 2010 EBITDA results.
For its part, Vodafone--which will retain its French roaming agreement with SFR--was pleased to conclude the sale.
"Our board remains committed to realising maximum value from our non-controlled assets," CEO Vittorio Colao told the Guardian newspaper. "The sale of our stake in SFR, at an attractive multiple, represents a significant further step in the execution of this strategy."
The sale of SFR is Vodafone's third, and largest, disposal of a minority stake since Colao took control as chief executive in 2008. The attention will now shift to the sale of Poland's Polkomtel, in which Vodafone has a 24 per cent holding. Seven potential buyers have reportedly been shortlisted to bid for the company.
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