Four years on from the height of the telecoms bubble, Vodafone is set to once again whet the industry’s appetite for mega-deals with an offer for US mobile operator AT&T Wireless that could amount to as much as US$35bn.
Rumours have abounded for several months that Vodafone is looking to cement its position in the lucrative US market, but until recently the conventional wisdom was that Verizon Wireless would be its natural target, since Vodafone already holds a 45pc stake in that network.
However, in a major strategic shift, it now looks like AT&T Wireless, the third largest operator in the US, is its new favoured buy. It is reported that Vodafone CEO Arun Sarin will today outline details of the bid to the Vodafone Board, ahead of the deadline for bids tomorrow.
Another US-based mobile network, Cingular, which is jointly owned by Bell South and SBC, has already confirmed that it plans to make a further bid by the bid deadline, having already tabled a non-binding bid of US$30bn or US$11 a share, for AT&T Wireless.
Helping Vodafone’s bargaining power will be its relatively strong financial position. At the height of the telecoms bubble when its rivals spent billions of dollars in cash on lavish acquisition moves, Vodafone, under the astute leadership of Chris Gent, executed mainly share-based transactions, thus escaping some of the debt that has burdened rivals such as France Telecom, Deutsche Telekom and BT Group.
By Brian Skelly