Vodafone share price surges amid renewed Liberty tie-up speculation

Shake-up of UK and German operations to net $20bn of savings

Vodafone share price surges amid renewed Liberty tie-up speculation

Shares in Vodafone (LON:VOD) have advanced today, amid renewed speculation that the company could agree a tie-up with peer Liberty Global. The reports come after earlier this year the UK telco’s chief executive Vittorio Colao signalled that he still sees a potential deal with the US group as attractive.

As of 14:28 GMT, Vodafone’s share price had added 1.34 percent to 207.95p, outperforming the broader London market, with the benchmark FTSE 100 index currently standing 0.57 percent higher at 7,410.34 points. The telco’s shares have lost more than five percent of their value over the past year, but have gained just under four percent in the year-to-date.

Shares in Vodafone have gained ground after sources told tech magazine The Register that the FTSE 100 telco and Liberty Global were in talks to create a joint venture with Vodafone’s UK operations. The US group’s German operations meanwhile will be sold to Vodafone.

City A.M. quoted Ulrich Rathe, an equity analyst at Jefferies, as estimating that the combination will net $14 billion of savings in the UK and $6 billion in Germany. He, however, cautioned that a deal faced “a grave regulatory threat, in the form of the long-standing opposition of the German Federal Cartel Office (FCO) to cable-cable consolidation”.

Vodafone and Liberty held talks over an asset swap in 2015, seen as a potential step toward a full merger, but the negotiations collapsed. The companies subsequently agreed a merger of their operations in the Netherlands.

In analyst ratings, BNP Paribas reiterated its ‘neutral’ stance on Vodafone this week, valuing the shares at 225p. According to MarketBeat, the blue-chip telco currently has a consensus ‘hold’ rating and an average price target of 232.18p.

As of 13:54 GMT, Thursday, 16 March, Vodafone Group plc share price is 208.45p.

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