My take on Vodafone's latest deal

Tuesday, May 01 2012 by
5

Vodafone’s latest deal fuels further earnings growth and dividend support

Vodafone's proposed takeover of Cable & Wireless Worldwide for 38 pence per share in cash - valuing the company at roughly £1bn -represents excellent value for Vodafone’s shareholders.

Once completed, and when properly absorbed, the deal could transform Vodafone into a major integrated telecoms business in the U.K., offering for the first time fixed and wireless communications and moving it from fourth to second place, only behind BT. In addition, it will double its corporate business in the U.K., while substantial disposal(s) of some of C&WW’s undersea cable networks as well as tax rebates may make this deal an absolute steal.

In the next few years, the deal is likely to yield substantial operating cost benefits in the U.K., with not only subsequent enhanced earnings potential, but also putting dividend growth prospects on a firmer footing going forward.

For more: http://seekingalpha.com/article/527081-vodafone-s-latest-deal-fuels-further-earnings-growth-dividend-support


Disclaimer:  

Steven Dotsch - Managing editor - http://www.dividend-income-investor.com - Guide to Dividend Investing, at: http://www.dividend-income-investor.com/guide-to-dividend-investing/ - Dividend Value Profiles, at:   http://www.dividend-income-investor.com/british-american-tobacco/


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Vodafone Group Plc (Vodafone), is a mobile communications company. Vodafone Red offers consumers and businesses a package with mobile data allowances, unlimited calls and texts, plus cloud and back-up services to secure personal data. Vodafone Cloud allows customers to store their personal digital content, such as contacts, photos and videos in the Vodafone network and to access it on the move from any connected device. Vodafone Secure Device Manager gives customer a way to manage many of their smart devices. In July 2014, the Company announced that it has completed the disposal of 49% interest in Vodafone Fiji Limited to the Fiji National Provident Fund. Effective July 23, 2014, Vodafone Holdings Europe SLU, a wholly owned unit of Vodafone Group PLC acquired Grupo Corporativo ONO SA (ONO). On August 14, 2014, Vodafone Global Enterprise and a unit of Vodafone Group PLC acquired a 97.332% interest in Cobra Automotive Technologies SpA. more »

Share Price (Full)
227.8p
Change
1.0  0.4%
P/E (fwd)
34.1
Yield (fwd)
5.1
Mkt Cap (£m)
60,377

Cable & Wireless Worldwide



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2 Posts on this Thread show/hide all

Tommy Boyd 5th May '12 1 of 2

Once completed = If completed surely?
The 1bn value is still far from being accepted by C&W shareholders.
The big question is how much the ageing under-investment UK cable network is actually worth in an increasingly technologically wireless world and how will Vodaphone make money from it where C&W could not?

Vodafone spent almost 6bn on UK G3 mobile licences; so they have form when it comes to overpaying for infrastructure and the Tax claw backs will just mean even less clarity in future on the state of their accounts,
I'm going to avoid.

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