Vodafone CLUB HISTORY COMPANY NEWS January 29, 2004 Vodafone ponders making bid for AT&T Wireless Vodafone, the world's biggest mobile phone operator, yesterday said it was considering whether to bid for AT&T Wireless, the telecoms group that received a $30 billion (£16.3 billion) approach last week from its US rival Cingular. But Arun Sarin, Vodafone chief executive, warned investors that there would be no imminent decision on whether to place an offer. Unveiling fourth-quarter subscriber numbers, Mr Sarin played down suggestions that he was planning to trade in Vodafone's 45 per cent stake in Verizon Wireless, the US market leader, so that he could take control of the third-ranked AT&T Wireless. But Mr Sarin said that Vodafone would make a decision on its plans once it had gathered more information on AT&T. "Not all the facts and circumstances and analysis are available to us so it's very hard for me to have a judgment at this point in time as to whether it's shareholder value creating or not," Mr Sarin said, after Vodafone revealed better than expected growth in its global customer base over the final quarter in 2003. "We're partners with Verizon Wireless in the US; we're therefore a large investor in the US. We're watching the developments, as you would expect," he said. Mr Sarin added: "We will look at what happens through the lens of shareholder value creation. That is the principal criterion for whatever we do or don't do in the US." AT&T Wireless has set a February 13 deadline for formal bids, with US operators Cingular, Deutsche Telekom and Nextel Communications likely to bid for the group. NTT DoCoMo, the Japanese mobile group that holds 16 per cent of AT&T Wireless, is also expected to bid. It is estimated that Vodafone could raise more than £20 billion through borrowing and equity. However, Vodafone has about £13 billion of debts, and fears that it may raise its borrowings hit shares, which slipped 3¾p to 141¼p. The company is also seeking to increase investments in other markets. The group hopes to take control of SFR, its minority French joint venture with Vivendi, the media conglomerate, and is also expected to increase its 20 per cent stake in Poland's Polkomtel. Mr Sarin said that it was difficult to call the timing of any French deal and added that "nothing is imminent" in Eastern Europe. "Eastern Europe in general and Poland in particular are very interesting markets. If the right opportunity were to present itself, we would be interested." Vodafone experienced the fastest growth to its customer base in three years as another 4.3 million people subscribed to its services, including 678,000 in the US, during the three months to December 31. Vodafone added 5.1 million new customers, including the buy-out of Greek operator Panafon, taking the total to 130.4 million. "Vodafone grew its subscribers faster than expectations in all its major European and US operators," analysts at Dresdner Kleinwort Wasserstein said. The company said that its average revenues per user (Arpu) were strong across all markets with the exception of Japan, where Arpu fell 6 per cent as a result of price cuts and a focus on the less lucrative pre-pay market. In Britain, where Vodafone is the largest mobile operator, Arpu for the 2003 calendar year climbed £2 to £299. Vodafone plots $30bn bid for US mobile firm Sunday February 1, 2004 The Observer Vodafone, the world's largest mobile telephone operator, is preparing to launch a $30 billion (£16.5bn) bid for AT&T Wireless, which would be its biggest acquisition since it bought German rival Mannesmann for about £100bn in 1999. Chief executive Arun Sarin is believed to have ordered his financial advisers to draw up a draft document to help persuade investors that the acquisition of US firm AT&T Wireless makes commercial and strategic sense. But there is still a chance that Sarin will be prevented from bidding by some of his big shareholders, who fear an aggressive move in the US will hold back earnings growth for one or two years. City sources believe Sarin will fight hard to make the case for a takeover of AT&T Wireless, which will receive initial bids from interested parties on 13 February. Rival offers are expected by US operator Cingular and Japanese giant NTT DoCoMo. To mount a successful bid for AT&T Wireless, Sarin will need to sell Vodafone's 45 per cent stake in US firm Verizon Wireless, in order to satisfy regulators. Verizon Wireless is majority controlled by Verizon Communications, and Vodafone's minority status within Verizon has been a constant cause for concern as it means Sarin cannot use the British company's brand name in the US, nor can it secure economies of scale in an operation where others hold the whip hand. Vodafone is in a similar situation in France, where one day it hopes to seize control of mobile phone company SFR, in which Paris-based Vivendi is the largest shareholder. Verizon Communications last week said it would not oppose a decision by Vodafone to sell its 45 per cent stake in Verizon Wireless, should Vodafone decided to bid for AT&T Wireless. 'We feel our relationship with Vodafone is working very well,' said Ivan Seidenberg, Verizon chief executive, but 'we would not shy away from wanting to own 100 per cent of Verizon Wireless'. Vodafone said last week that its sales performance in the three months to 31 December was the strongest in terms of customer growth for three years. It has added more than 4.3 million, taking its total customer base to more than 130.4 million. Sarin responded to media questions about AT&T Wireless by saying: 'Obviously we are watching the situation to see what, if anything, we do or don't do in the US.' But a senior City telecoms analyst said: 'Grabbing AT&T Wireless is a one-off opportunity for Vodafone to control a major telecoms asset in the most lucrative market in the word. He [Sarin] would be crazy not to bid.' Observer 07 September, 2003 The telecoms firm was a favourite in the late 1990s, and its price hit 385p. But when the tech bubble burst, investors dumped the stock and the price plunged to 85½p in July last year. Vodafone has since recovered, but it has still been lagging the FTSE All-Share. Over the past three months, for example, it has dropped 9%, underperforming the market by 13%. However, Credit Suisse believes it should benefit from the next phase of the recovery. McQuaker says: "The shares are trading below their long-term average level and also have growth potential." The shares cost 119p. Visit the company website Top of page