Vodafone has bowed out of a brief, but tense, bidding war for the third biggest mobile operator in the US after rival Cingular upped its offer to US$15 a share, or US$40bn, a 35pc increase in its bid for the company.
Vodafone confirmed in a statement to the London Stock Exchange that it withdrew from the auction this morning “when it concluded that it was no longer in its shareholder’s best interests to continue discussions.”
Vodafone said it “remains committed to its existing position in the US market with its successful partnership in Verizon Wireless.” Vodafone owns a 44pc stake in Verizon Wireless. Relieved shareholders who frowned on the prospect of a bidding war rallied to Vodafone as shares in the company surged 5.28pc in London.
It is understood that Cingular signed a deal with AT&T Wireless at around 6am this morning after Cingular’s 35pc bid increase became known.
It is believed that Cingular is viewed as the company with the most to gain by acquiring AT&T Wireless. If the companies combined their networks, experts believe they could save US$2bn a year within a few years.
AT&T Wireless put itself up for sale last month after receiving an offer from Cingular, which is owned by SBC Communications.
By John Kennedy