Vodafone Group PLC (LSE:VOD) shares jumped over 2% on a report that the merger of its UK mobile operations with Three is just days away from being agreed, but there seems little for investors to get excited about.
Simply, the deal seems to have little chance of getting the green light from the Competition & Markets Authority, with the pair being two of the UK's four largest mobile operators.
Moreover, the antitrust watchdog also recently blocked Microsoft's takeover of Activision Blizzard, not to mention deciding that Broadcom's swoop for VMWare would also hurt competition.
The shares sinking to a recent 16-year low was the main reason the shares jumped today (2% is a big deal for Vodafone), with investors having found it hard to get excited by any recent developments, be they the mooted Three deal, stake-building from e&, Iliad and Liberty Global, nor the 11,000 job cuts and other turnaround plans from new boss Margherita Della Valle.
The low valuation also puts negotiations with Hutchinson on a weaker foot, surely.
What's more, there is a large cloud lurking over the industry in the shape of Amazon, where rumours suggest talks are underway with major networks in the US that could be rolled out overseas.
Had this happened already it might have been a factor in the CMA decision-making, though.
The deal "should not be approved under the current regulatory and market environments," says analyst Paolo Pescatore at PP Insight, pointing to the precedent set by the failed Three merger with O2.
"The only chance it has of getting over the line is whether both parties can demonstrate that this is in the genuine interests of UK PLC – the economy, productivity, consumers," he says, adding that telecoms regulator Ofcom recognises the challenges of the UK mobile market and need for scale.
He adds that while "a marriage of convenience makes sense", with the added scale key to helping lower costs and improve margins, "It will take years before we see the real fruits of this deal come to fruition. Can the UK wait that long?"
One sliver of potential encouragement for investors is that Ofcom's point on scale seems to have government, though it may only be tacit.
The Department for Science, Innovation and Technology's UK Wireless Infrastructure Strategy white paper made a point to emphasise that neither Vodafone nor Three have been able to cover their cost of capital since 2018.
This point – especially as this was a key reason why a senior EU court ruled that the European Commission's pre-Brexit decision to block Three's agreed merger with O2 may have been a mistake – could provide a strong reason for the CMA to wave through the deal.
As Microsoft's furious reaction highlighted, the regulator has not made a point of making recent decisions in line with big corporate interests or government wishes.