Vodafone could be bought and disappear from the FTSE 100 says Brewin Dolphin

20th January 2014

Investment firm Brewin Dolphin has suggested that Vodafone could disappear from the UK market following a US or Japanese takeover.

Writing on the firm’s blog for investors, Divisional Director Nik Stanojevic suggests that a Japanese or US buyer most likely US telecoms giant AT&T could buy the firm.

Previously US ant-trust legislation prevented a move by AT&T because of its 45% stake in Verizon Wireless.

Such a move would be possible after the distribution of the Vodafone special dividend which takes place on 24th February – two thirds of which will be in Verizon Communications shares and one third in cash.

The note continues: “AT&T could be preparing to bid for Vodafone after the distribution (it is not possible before this due to antitrust). AT&T has made no secret of its international ambitions and has the balance sheet to support a bid, which would certainly also contain a large share component. A highly profitable US wireless market means that telecoms shares are trading at a premium to European listed companies. AT&T may choose to use its own highly rated shares as an acquisition currency”.

Whatever happens with AT&T, Stanojevic says that shareholders which don’t want to own Verizon shares with its US exposure (and maybe those of AT&T if it uses them to buy Vodafone) might look to Europe for similar stocks.

He suggests investors might look at Dutch firm KPM, Portugal Telecom and Telecom Italia.

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