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Vodafone deal with Liberty could provide investors with huge boost, says UBS

Vodafone deal with Liberty could provide investors with huge boost, says UBS
Are Voda and Liberty ready to take their relationship to the next level?

The Swiss investment bank UBS put what it called a ‘key call’ on Vodafone (LON:VOD), which essentially looked at the broader ramifications of its tie up with American giant Liberty Global.

On Thursday the pair received regulatory clearance to combine assets in the Netherlands.

UBS reckons there would be huge potential benefits for a much broader deal that would bring mobile and fixed line business together.

The broker reckons an all-in merger would generate synergies with a net present value of almost £20bn with a further £5.4bn of tax savings.

Assuming a 50% share of the upside, this equates to a 47p a share boost to Voda shares, which are currently changing hands for 225p each.

Finally, after a number of false dawns and political wrangling over its assets in Egypt, Centamin (LON:CEY) is ready to fulfil its potential.

That, at least, is the opinion of Hunter Hilcoat, analyst at Investec, who was buoyed by the gold digger’s first half performance.

So much so he has upgraded his year-end production forecast from just over 500,000 ounces of the yellow metal to 530,000 ounces.

That said, it has taken a while to get to this point. The analyst expected Centamin to above half a million ounces around three years ago!

Things are looking up with a rising gold price and a best-in-class cost structure that sees the group mining at an all-in US$800 an ounce.

Hilcoat maintained his ‘buy’ recommendation and 192p a share price target (current price 151.75p, up 3%).

Elsewhere, it wasn’t a particularly good day for the paper and packaging firm Mondi (LON:MNDI), which was struck by an oncoming Goldman Sachs downgrade.

Details are little sketchy for the broker’s switch to ‘sell’ other than it sees better value elsewhere in the sector.

Going in the other direction with a rise of more than 3% was Amec Foster Wheeler (LON:AMFW), which benefited from a Bank of America Merrill Lynch upgrade to ‘buy’ from ‘neutral’.

The other major broker move was Hays (LON:HAS) where Credit Suisse has taken its recommendation to ‘neutral’ from ‘underperform’ in the wake of ‘in-line’ prelims on Thursday.

Finally, finishing where we started (with UBS rather than Vodafone). The bank has carried out some interesting analysis on the bookmakers.

The Swiss bank’s boffins has analysed app store downloads, which, they reckons, are a good proxy for just who is winning and losing in the online market share.

The data, UBS says, is “supportive” of its positive view on Ladbrokes (LON:LADB) and the more cautious tack on William Hill (LON: WMH).

The former is rated ‘buy’ up to 180p a share, while the latter is remains a ‘neutral’ call with a price target of 280p.


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