There are always plenty of numbers to evaluate when weighing up whether to buy a particular share.
Today I’m going to quickly review three figures for anyone thinking about investing in Vodafone (LSE: VOD) (NASDAQ: VOD.US).
1. $130bn
For months now, analysts and investors alike have been speculating about the price that Verizon Communications could potentially pay to buy out Vodafone’s 45% interest in their joint-venture, Verizon Wireless.
Different figures had been bandied about by representatives from both parties, ranging from $100bn to $135bn. But the beginning of last week saw a deal agreed, and shareholders should have been pleased at the sight of the offer at the top end of the scale.
Indeed,the $130 deal triggered a raft of new investors as the share price rallied by more than 3% on the day.
At $130bn, the transaction is set to be the third-largest in corporate history, following Vodafone’s $183bn purchase of Mannesmann and AOL’s purchase of Time Warner for $164bn, both of which occurred during the dotcom bubble of 2000.
2. 217p
That is the target price analysts at Deutsche Bank set for Vodafone at the end of June, after moving the stock to a ‘buy’ following reports the company was likely to enter into discussions with Verizon.
But on the day the telecom group actually revealed talks about the sale of its 45% stake in Verizon Wireless had involved a $130bn valuation, the share price shot up to 215p — and that was without official confirmation of how much of that bid could find itself winging its way into shareholders’ pockets by way of a special dividend.
That payout has since been confirmed as 112p per Vodafone share in the form of Verizon stock and cash.
Further news will enlighten investors even more, and it wouldn’t be altogether surprising to see analysts up their target prices before long.
3. £7.6m
As the holder of 6.8 million shares in the company, Vodafone’s chief executive officer Vittorio Colao is set to receive a personal windfall of around £7.6m from the Verizon deal.
Colao has been in the top job since 2008, having previously worked for Vodafone after rising to the top job of Omnitel Pronto Italia in 1999, which later became Vodafone Italy.
He became Vodafone’s chief executive for Southern Europe in 2001, and his remit extended to include the Middle East and Africa as well in 2003.
There followed a two-year hiatus in 2004 as Colao joined Italian publishing company RCS, but he quit after two years citing differences in strategy, and rejoined Vodafone as boss of Europe until he took his current role five years ago.
The Vodafone chief exec will now face the challenge of how to invest the remaining money from the deal in further acquisitions. Shareholders will do well to keep a close eye on proceedings, as acquisitions are likely to shape the company’s future in the near term considerably.
However, City super investor Neil Woodford made a judgment call on Vodafone earlier in the year — selling Invesco Perpetual High Income’s entire holding in the telecommunications giant in February. Many believe Mr Woodford got it wrong, but his fears over Vodafone’s exposure to Europe remain… it’s worth doing your research on the company before you make a call on the shares yourself.
However, if you’re thinking of moving your money away from Vodafone, and you’re interested to see which sectors the City maestro is backing instead, then check out The Motley Fool’s newly updated special report, “8 Shares Held By Britain’s Super-Investor“.
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> Sam owns shares in Vodafone. The Motley Fool has recommended shares in Vodafone.
