Emirates State-Backed Telecom Firm Scoops Stake In Vodafone For $4.4B; Continues To Fuel Takeover Concerns

Emirates state-backed telecom firm e& acquired a 9.8% stake in Vodafone Group Plc VOD, Bloomberg reports.
Emirates Telecommunications Group Company PJSC , now known as e& bought a $4.4 billion stake offering 130 pence ($1.59) a share
Vodafone CEO Nick Read is trying to consolidate in key markets amid pressure from shareholders.
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A wealthy, supportive shareholder could give Read cover to reset expectations around investment and profits by supporting the share price, Jefferies analyst Jerry Dellis said.
The move could give Read more incredible cover to spend upgrading its network like Vodafone’s cable footprint in Germany to fiber.
“We expect e& to counteract activist pressure, not add to it,” Dellis said.
He noted that e&’s CEO Hatem Dowidar previously worked at Vodafone for 17 years, including Read.
e&’s arrival may trigger new takeover concerns for Vodafone’s board, which recently added three directors with telecom, technology, and regulator experience.
After e&’s standstill expires, its controlling shareholder, the UAE state, could easily find a way to fund a complete acquisition, said New Street Research analyst James Ratzer.
The takeover could face political investigation by the UK, Ratzer added.
Price Action: VOD shares traded higher by 2.94% at $15.06 in the premarket on the last check Monday.
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