Vodafone sent tumbling after AT&T backs off

Elizabeth Fournier
US MOBILE giant AT&T yesterday backed away from a long-rumoured bid for Vodafone, sending the telecoms group shares lower as it promised to stay away for at least six months.

In a brief statement released at the request of the UK’s takeover panel, AT&T said it “does not intend to make an offer for Vodafone”.

Speculation over a possible bid was reignited last week when Sky News reported that AT&T chairman Randall Stephenson had met EU telecoms commissioner Neelie Kroes at the World Economic Forum in Davos to discuss the firm’s strategic options in Europe.

Shares in Vodafone slumped as much as seven per cent as the market opened, ending the day 3.9 per cent lower as investors wiped more than £4bn off the value of the company.

“We suspect that [AT&T] could not get comfortable with an offer given the tumultuous state of European telecoms from a regulatory, competitive and economic perspective,” said Espirito Santo’s Robert Grindle.

Takeover panel rules – which were beefed up in 2011 – now prevent AT&T from coming back with a formal offer for Vodafone within the next six months, prohibiting an approach until late July.

AT&T is the second-largest mobile provider in the US. Rumours began mounting that it was considering a takeover of the UK company in the wake of Vodafone’s agreed disposal of its stake in Verizon Wireless last year, and after its chief executive said in October there was a “huge opportunity” in Europe to invest in mobile broadband.

Related articles