Shares in mobile phone group Vodafone (VOD) dialed up higher today on reports that Liberty Global (LBTYA) was in talks to buy its stake in its Dutch joint venture.
Early Stage Discussions
As reported by the Financial Times the talks could value Vodafone’s share of the VodafoneZiggo group at over $2.2 billion. Vodafone teamed up with Liberty Global in 2016 to create Ziggo with each company owning equal stakes.
According to the FT the two groups have been in discussions over a potential deal for several months, however it is understood that they remain at an early stage. It is unclear, the newspaper said, whether Vodafone is even willing to sell its stake.
Back in 2016, analysts believed that the JV was seen as the first course on the way to a larger deal between the two firms. Despite Liberty Global buying a 5% stake in Vodafone in 2023 that tie-up has not materialised and this move by could be the final nail in that particular M&A coffin.
Consolidation Push
It comes, however, as European telecoms groups lobby the EU to loosen merger rules for the sector. They believe that without more consolidation telecoms firms will struggle to boost investments in areas like 5G.
Vodafone has already made its moves including gaining approval last year for a merger with Three UK which created Britain’s largest mobile operator. It has also though been selling off assets to cut debt and streamline its operations such as offloading its Italian business to Swisscom earlier this year.
Is VOD a Good Stock to Buy Now?
On TipRanks, VOD has a Moderate Buy consensus based on 2 Buy and 1 Hold rating. Its highest price target is $1.75. VOD stock’s consensus price target is $1.75 implying an 81.68% downside.
