Vodafone Group PLC (LSE:VOD) had a rough hump day this Wednesday, with shares in the British telecoms multinational on a downward trajectory and Deutsche Bank slashing its price target.
The FTSE 100 constituent topped the fallers' table after Iliad Group disclosed that Vodafone had rejected another proposal to merge the groups’ Italian businesses.
Iliad said the merger would have created the most innovative telecoms challenger for Italy, but Vodafone had failed to accept the offer.
“The Iliad Group is confident that the offer presented was the best possible business combination to benefit a struggling Italian market and telecommunications industry,” read the press release.
Under the rejected offer, Vodafone would have received €6.6 billion (US$7.1 billion) in cash and a €2 billion shareholder loan, while Iliad would get €400 million in cash and a €2 billion loan.
Iliad also offered to give up its options that would have led to an increased stake in Vodafone down the line.
Paris-based Iliad initially presented Vodafone with a €6.5 billion cash offer in December 2023, which valued Vodafone’s Italian arm at €10.45 billion.
"Vodafone is supportive of in-market consolidation in countries where it is not achieving appropriate returns on invested capital and confirms it is exploring options with several parties to achieve this in Italy, including through a merger or a disposal," Vodafone said at the time.
Switzerland-based telecoms group Swisscom is also reportedly eyeing up a move for Vodafone’s Italian business.
Vodafone shares were put further under the cosh after Deutsche Bank lowered its price target to 145p from 165p, although it has kept a 'buy' rating on the stock.
“Even in the context of a 'tough gig' sector, Vodafone seems to consistently snag competitively, technologically or geopolitically, somewhere in its broad footprint,” said Deutsche Bank’s head of European TMT research Robert Grindle.
Vodafone shares were nearly 3% lower at 66.78p as of 11.15am.