Liberty Global is nearing a deal to sell its Austrian business, with the move expected to open the door for the US company to reopen merger talks with Vodafone Group (LON:VOD), the Financial Times has reported. 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.
Vodafone’s share price had inched marginally lower in today’s session and as of 09:51 GMT was standing 0.23 percent lower at 234.90p. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.08 percent higher at 7,609.98 points. The telco’s shares have added more than 17 percent to their value over the past year, as compared with an over seven-percent gain in the Footsie.
Liberty talks prospects
The FT reported yesterday that Liberty Global was nearing a deal to sell its Austrian business to Germany’s Deutsche Telecom for about $2 billion. People close to the company told the newspaper that the move was part of the US group’s boarder efforts to restructure its business to prepare for negotiations with Vodafone about combining to create a global telecom and cable company worth about $175 billion.
Vodafone and Liberty Global are not currently holding merger talks but both sides are constantly exploring the possibility.
Earlier this year, Vodafone’s chief executive Vittorio Colao signalled that he still saw a potential deal with the US group as attractive.
Analysts on Vodafone
Both JPMorgan Chase & Co and Barclays reaffirmed Vodafone as an ‘overweight’ this month, valuing the shares at 300p and 280p, respectively. According to MarketBeat, the telco currently has a consensus ‘hold’ rating and an average price target of 248.78p.