Hands0n
12th March 2006, 03:04 PM
If you've a few spare coppers in your purse you might want to get in on this Venture Capitalist (VC) scheme to buy out Vodafone in toto for £100 billion.
I'm not convinced that a VC buyout of Vodafone would be good for Vodafone, its customers or the mobile telephony business itself. The crushing drive would be for a return on the investment. With that investment being [possibly] the largest in commercial history ever one could well imagine that the entire focus would become purely that of generating revenue and to hell with anything else. The words Cow and Cash spring to mind.
Would this new company, then, be anything like that which we know currently? Would big sacrifices be made in non-revenue generating areas such as Customer Services? Would everything, absolutely everything, have a price tag associated with it? Would the VCs simply drag Vodafone to ruination and ultimately demise - not unheard of with other such ventures in history.
Or would Vodafone simply morph into a huge converged multimedia and network company, exploit its brand reputation and become even bigger, more successful and become the brand of first choice for the average consumer?
For sure, this is one to watch develop.
Lisa Buckingham and Simon Fluendy, Mail on Sunday
12 March 2006
AN audacious £100bn takeover bid for troubled Vodafone is being weighed up by specialist venture capital groups.
A deal of such a size would far outstrip anything venture capital predators have so far considered and would be seen as an opportunistic way to exploit the mobile phone giant's boardroom problems.
These have seen the old guard, including former chief executive Sir Chris Gent and current chairman Lord MacLaurin, pitted against chief executive Arun Sarin.
The disclosure that venture capitalists are contemplating Vodafone as a target follows revelations that BT is also in their sights.
Senior City sources, who have been consulted about a potential Vodafone assault, say the discussions are being led by venture capitalists specialising in telecoms, including Apax and CVC Partners.
'Soundings are being made,' said one source. 'No one's committed and they are not sure there's a way of doing it, but they are convinced of the potential value in a deal.
'The problem is that no one could put up much more than £5bn in equity, and funding the rest would virtually drain the debt market, so they are looking at ways of leaving existing investors with a lot of the paper. There is no way this could be done as a conventional cash-only VC bid.'
Though about 40% of recent European telecoms deals have involved private equity, the largest was a $15.3bn (£8.8bn) consortium deal for Danish phones group TDC.
Despite its recent problems, Vodafone is still valued at about £70bn. Traditionally, takeover bids command a premium, which would leave the venture capitalists having to fund an astonishing £100bn.
But Vodafone is seen as a plum target. Its core business is reliable and generates cash, which could be used to repay debt. Also, it is estimated that its joint ventures, which could be sold to raise money, are worth more than 40% of the company's value.
Under pressure from investors to perform, Sarin is selling the Japanese division and will hand back billions of pounds to investors.
It has been suggested that he is trying to offload the company's Australian interests, and a number of shareholders, including insurer Standard Life, have said Sarin must soon try to extricate the group from its joint venture deal in America.
The company sacked marketing director Peter Bamford last week and said it would institute a marketing review, but City sources said this would be more far reaching. One said: 'It is a strategy review.
It will look at global footprint and even whether Vodafone should remain a pure mobile player or if it should look at fixed-mobile convergence.'
Vodafone today tried to draw a line under rumours of a boardroom rift after its chairman released a statement backing the group's chief executive.
Speculation was rife in the Sunday papers that Lord MacLaurin had been attempting to oust Arun Sarin following a run of disappointing announcements from the company.
It was claimed Lord MacLaurin had tried to force a vote of no confidence in the Vodafone boss, while there was speculation that he would use a key meeting with the group's largest investors tomorrow to gauge support for the chief executive, ahead of a 'showdown' meeting between the two.
But late last night Lord MacLaurin issued a brief statement in which he said Mr Sarin had the complete backing of the board, according to the Sunday Telegraph. It reported the statement as saying: 'There is no showdown meeting with Arun Sarin. And Arun has the complete backing of the board.'
Article Source: http://www.thisismoney.co.uk/news/article.html?in_article_id=407567&in_page_id=2
I'm not convinced that a VC buyout of Vodafone would be good for Vodafone, its customers or the mobile telephony business itself. The crushing drive would be for a return on the investment. With that investment being [possibly] the largest in commercial history ever one could well imagine that the entire focus would become purely that of generating revenue and to hell with anything else. The words Cow and Cash spring to mind.
Would this new company, then, be anything like that which we know currently? Would big sacrifices be made in non-revenue generating areas such as Customer Services? Would everything, absolutely everything, have a price tag associated with it? Would the VCs simply drag Vodafone to ruination and ultimately demise - not unheard of with other such ventures in history.
Or would Vodafone simply morph into a huge converged multimedia and network company, exploit its brand reputation and become even bigger, more successful and become the brand of first choice for the average consumer?
For sure, this is one to watch develop.
Lisa Buckingham and Simon Fluendy, Mail on Sunday
12 March 2006
AN audacious £100bn takeover bid for troubled Vodafone is being weighed up by specialist venture capital groups.
A deal of such a size would far outstrip anything venture capital predators have so far considered and would be seen as an opportunistic way to exploit the mobile phone giant's boardroom problems.
These have seen the old guard, including former chief executive Sir Chris Gent and current chairman Lord MacLaurin, pitted against chief executive Arun Sarin.
The disclosure that venture capitalists are contemplating Vodafone as a target follows revelations that BT is also in their sights.
Senior City sources, who have been consulted about a potential Vodafone assault, say the discussions are being led by venture capitalists specialising in telecoms, including Apax and CVC Partners.
'Soundings are being made,' said one source. 'No one's committed and they are not sure there's a way of doing it, but they are convinced of the potential value in a deal.
'The problem is that no one could put up much more than £5bn in equity, and funding the rest would virtually drain the debt market, so they are looking at ways of leaving existing investors with a lot of the paper. There is no way this could be done as a conventional cash-only VC bid.'
Though about 40% of recent European telecoms deals have involved private equity, the largest was a $15.3bn (£8.8bn) consortium deal for Danish phones group TDC.
Despite its recent problems, Vodafone is still valued at about £70bn. Traditionally, takeover bids command a premium, which would leave the venture capitalists having to fund an astonishing £100bn.
But Vodafone is seen as a plum target. Its core business is reliable and generates cash, which could be used to repay debt. Also, it is estimated that its joint ventures, which could be sold to raise money, are worth more than 40% of the company's value.
Under pressure from investors to perform, Sarin is selling the Japanese division and will hand back billions of pounds to investors.
It has been suggested that he is trying to offload the company's Australian interests, and a number of shareholders, including insurer Standard Life, have said Sarin must soon try to extricate the group from its joint venture deal in America.
The company sacked marketing director Peter Bamford last week and said it would institute a marketing review, but City sources said this would be more far reaching. One said: 'It is a strategy review.
It will look at global footprint and even whether Vodafone should remain a pure mobile player or if it should look at fixed-mobile convergence.'
Vodafone today tried to draw a line under rumours of a boardroom rift after its chairman released a statement backing the group's chief executive.
Speculation was rife in the Sunday papers that Lord MacLaurin had been attempting to oust Arun Sarin following a run of disappointing announcements from the company.
It was claimed Lord MacLaurin had tried to force a vote of no confidence in the Vodafone boss, while there was speculation that he would use a key meeting with the group's largest investors tomorrow to gauge support for the chief executive, ahead of a 'showdown' meeting between the two.
But late last night Lord MacLaurin issued a brief statement in which he said Mr Sarin had the complete backing of the board, according to the Sunday Telegraph. It reported the statement as saying: 'There is no showdown meeting with Arun Sarin. And Arun has the complete backing of the board.'
Article Source: http://www.thisismoney.co.uk/news/article.html?in_article_id=407567&in_page_id=2