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Vodafone goes east in new takeover talks

Damien Reece
Thursday 10 March 2005 01:00 GMT
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Vodafone is in talks to expand its eastern European operations by acquiring mobile phone operators in Romania and the Czech Republic in a deal that could be worth up to £1.7bn.

Vodafone is in talks to expand its eastern European operations by acquiring mobile phone operators in Romania and the Czech Republic in a deal that could be worth up to £1.7bn.

The world's biggest mobile operator yesterday said that it was in discussions with Telesystem International Wireless, a Canadian company, to buy its stakes in MobiFon of Romania and Oskar Mobil of the Czech Republic, handing control of the two companies to Vodaphone.

The company said the transaction would not interrupt its ongoing share buy-back programme worth £4bn this year.

Vodafone said any offer would equate to a value per TIW share close to its closing share price on March 8. This would value TIW at C$4.15bn (£1.7bn).

Analysts at Credit Swiss First Boston said: "The words 'Vodafone' and 'acquisition' have generally not been good for the Vodafone share price of late, but in this case we see a more rational and potentially more value-creating acquisition path emerging ... It is our view that buying in eastern Europe makes sense as the eurozone grows."

Shareholders are hoping that Vodafone will increase the amount of cash it hands back to investors, despite the company already doubling its dividend and increasing its share buy-back programme.

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