Renewed Takeover Talk Surrounds Vodafone Group plc

Yet another company is rumoured to be weighing up a bid for Vodafone Group plc (LON: VOD).

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Since Vodafone‘s (LSE: VOD) (NASDAQ: VOD.US) split with joint-venture partner, Verizon Communications, the company has been subject to almost continual takeover speculation and it looks as if this speculation is set to continue. 

American giant

In particular, as soon as the ink had dried on Vodafone’s deal with Verizon, rumours started to spread that the company was about to be acquired by US telecoms giant AT&T. However, despite this speculation AT&T has yet to show any real interest in acquiring Vodafone, although the company has not completely ruled out a bid.

Indeed, some City analysts believe that AT&T is still contemplating a tie-up with Vodafone but is trying to drive down Vodafone’s share price first, in order to get a better deal.

Nevertheless, rumours are starting to arise that suggest that AT&T may have missed its chance to make a bid, as Vodafone may have found another suitor. 

Another suitor

During the past week or so, there has been rising speculation that Japan-based SoftBank, could be weighing up a bid for Vodafone.

Indeed, SoftBank appears to be on the hunt for acquisitions in the telecommunications space as the Japanese company already owns 80% of US-based telecoms company Sprint.

What’s more, SoftBank has been trying to broker a deal between Sprint and T-Mobile US, another mobile carrier based within the United States, for some time now. However, US regulators have said that they will block a deal between Sprint and T-Mobile US on competition grounds; T-Mobile US is owned by Germany’s Deutsche Telekom.

So, it would appear that SoftBank is looking to acquire Vodafone to take the bank’s telecoms ambitions global. 

A big deal

Still, Vodafone is not a small company and the firm’s current market price indicates that SoftBank would have to pay an eye-watering £60bn to acquire the whole company.

This price tag is enough to put many suitors off, but SoftBank is not worried, as the bank owns a 37% stake in Alibaba, China’s leading e-commerce company, which is expected to make its public debut in New York later this year.

Now, Alibaba is no small start-up: the company’s IPO is expected to be one of the largest of all time and initial estimates put the company’s market value at $140 billion, or £88bn, nearly one-and-a-half times the size of Vodafone. SoftBank should net around £32bn from Alibaba’s IPO, giving the company cash to throw at a Vodafone acquisition. 

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Rupert does not own any share mentioned within this article. 

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