Vodafone plans $30 bln bid for AT&T Wireless-report
forbes.com
Vodafone plans $30 bln bid for AT&T Wireless-report
Reuters, 02.01.04, 8:44 AM ET
LONDON, Feb 1 (Reuters) - The chief executive of Britain's Vodafone <VOD.L> is believed to have told financial advisors to draft documents to try to persuade investors that a bid for AT&T Wireless is a good idea, The Observer newspaper reported on Sunday.
Speculation is mounting that Vodafone, the world's largest mobile phone firm, is tempted to trade its minority position in No. 1 U.S. cellphone provider Verizon (nyse: VZ - news - people) for control of AT&T Wireless (nyse: VZ - news - people), the No. 3 mobile phone group.
AT&T Wireless, which has a market capitalisation of around $30.36 billion, put itself up for sale on January 22 as it reported poor results and high customer turnover. On Tuesday, the firm set a mid-February deadline for suitors to submit final offers.
Banking sources told Reuters last week that Vodafone had been sounding out the loan market about financing for possible acquisitions. Although Vodafone is regularly in contact with bankers about existing and possible new credit facilities, sources said the discussions were more focused than usual.
However, some investors and analysts are growing increasingly concerned that a 30 billion-plus bid auction for AT&T Wireless risks upsetting Vodafone's current U.S. strategy.
"It is as if a train were heading straight for Vodafone and they weren't getting out of its way," one London-based analyst said.
"I think this would be a disaster," he added.
Vodafone Chief Executive Arun Sarin told reporters last week when releasing strong Christmas quarter subscription figures that he was watching developments in the U.S., but that he would do nothing that would harm shareholders' best interests. He declined to comment further.
Vodafone could not be immediately reached for comment.
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