IN THE US, where AT&T is based, there is no regulatory obligation for firms to comment on rumours or speculation that might link them to a bid. Often, the first the market will know of a deal is after a definitive merger agreement has been signed – in fact, even if talks are ongoing, a firm can issue a simple “no comment” and carry on regardless.
But when he (apparently) started eyeing up Vodafone, chairman Randall Stephenson came up against a very different set of rules.
Following a tightening of the UK’s takeover code in 2011, the takeover panel can now demand certain things from hungry bidders – confirmation of talks sets the clock ticking on a 28-day countdown, while a denial prevents the potential buyer from coming back within six months.
As Vodafone found out yesterday, the panel’s stipulations can be incredibly market sensitive – as AT&T denied its interest, shares slumped almost seven per cent.
But the dip looks small when compared to the 30 per cent that the shares have risen in the past year – since Vodafone finally offloaded its stake in its US joint venture with Verizon, with promises of a special dividend and its more attractive status as a takeover target driving interest in the sprawling telecoms group.
Six months isn’t long to wait – especially when a slice of £54bn is on the table – and a falling price means there’s a very good reason for Stephenson to wait out the takeover panel and try again in the summer.
Investors should stick around.