An activist investor could be just what Vodafone needs
Vodafone is 30 years old but the high point for its shareholders, remarkably, came 20 years ago – in the days when mobile phones were new and exciting. The group had just completed its daring and record-breaking acquisition of German group Mannesmann. Its share price hit 400p and the UK seemed to have a global success on its hands.
Since then, Vodafone’s tale has been one of many more rounds of deal-making, but mostly to try to keep up with a telecoms industry where investment demands only seem to get bigger, especially when fast-fibre comes along to complicate the fixed line-versus-mobile balance.
There was a false dawn in 2013 when Vodafone sold its US assets to Verizon at the splendid price of £100bn. However, a few of the resulting purchases in Spain and Germany (again) now look to have been done at prices that were too rich. The group’s returns have been below its cost of capital for more than a decade, calculate Credit Suisse’s analysts.
The share price lost touch with 200p around 2018, just before a hefty dividend cut. The price is now 130p. So, yes, this is fertile territory for an activist investor. Swedish-based group Cevian Capital hasn’t yet declared its stake or its ambitions, but its arrival will be welcomed by other shareholders.
The popular diagnosis is that Vodafone is too damn complicated. At BT, shareholders (finally) know what they’re getting: a bet on UK fibre rollout and 5G. Vodafone’s pan-European business, by contrast, is a mish-mash of wholly owned operations, majority owned businesses and 50-50 joint ventures. Add the African Vodacom operation plus Turkey and the setup still looks like a sprawling empire. It wouldn’t matter if overall revenues were flying, but they’re not.
To be fair to chief
Read more on theguardian.com
