Bottom Line: Time for Colao to hunt bigger fish
VODAFONE’s chief executive was crystal clear when asked yesterday whether he was planning bids for either ITV or Channel 5. No. But Vittorio Colao was less crystal clear when a tie-up with BSkyB was hinted at, saying the company was in talks with potential partners on commercial deals.
Vodafone customers already have access to Sky Sports clips on their mobiles, but why stop there? Sure, strategic links are cheaper than audacious takeover bids, but it’s not as if Colao is lacking firepower – the £6bn Ono acquisition barely dented the £78bn he made selling Vodafone’s stake in Verizon Wireless last year.
Analysts say a merger between Sky and Vodafone could be worth as much as 250p per share in synergies to both players. It would also go a long way to getting AT&T, which has been circling Vodafone for months, off Colao’s back. It makes sense. Of course there’s one major spanner in the works. Rupert Murdoch may have abandoned plans to win outright control of BSkyB back in 2011, but since his media empire was split last year into 21st Century Fox and “new” News Corp, antitrust concerns will have receded.
But a bit of competition shouldn’t put Colao off. If there was ever a right time for Vodafone to strike, it’s now.