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Vodafone perks up as Middle Eastern investor takes US$4.4bn stake

Last updated: 08:20 16 May 2022 BST, First published: 07:42 16 May 2022 BST

Vodafone Group PLC -

Vodafone Group PLC (LSE:VOD) shares rang up some gains on Monday morning after a big new investor emerged on its shareholder register, in the form of Emirates Telecommunications Group, ramping up pressure on the board ahead of its full-year results on Tuesday.

The Abu Dhabi-based investor, known as Etisalat or e&, bought a 9.8% stake for US$4.4bn, making it Vodafone’s largest shareholder.

READ: Vodafone downgraded ahead of results, but analysts see 'significant synergies' from Three merger

This comes days after the FTSE 100 telecoms group was reported to be in talks with the owner of Three about merging their UK businesses. 

It also follows the emergence of activist investor Cevian Capital on the register back in January with the Swedish group calling for strategic and boardroom improvements.

Vodafone boss Nick Read has said the board are in talks with “multiple parties on multiple markets”, thought to include selling or merging UK, Spanish and Italian operations to reduce debt and improve the share price performance, which has seen the value of the company more than halved over the past six years.

While Cevian has been reported as putting pressure on the board to sell off some business units, return cash to shareholders and bring more telecoms experience onto the board, e& said it has no intention of seeking a board seat or making a takeover offer, and is supportive of management and strategy.

Hatem Dowidar, chief executive of e& and the former head of Vodafone’s Egypt business, said in the statement that the investment “represents a unique opportunity to acquire a significant stake in one of the leading and strongest global telecom brands, and a company that we know well.

“We are looking forward to building a mutually beneficial strategic partnership with Vodafone with the goal of driving value creation for both our businesses, exploring opportunities in the rapidly developing global telecoms market and supporting the adoption of next-generation technologies."

Vodafone shares jumped 3.5% to 122p in early trading, down 15% over the past 12 months and 45% over five years. 

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