A business group representing German broadband providers has called on EU regulators to block Vodafone’s (LON:VOD) acquisition of Liberty Global’s German operations, Reuters has reported. The news comes after the head of Telefonica Deutschland recently urged Brussels to block the deal.
Vodafone’s share price has been little changed in London in today’s session, having inched 0.07 percent lower to 147.78p as of 14:45 GMT. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.68 percent higher at 7,166.02 points. The group’s shares have given up nearly 32 percent of their value over the past year, as compared with a near five-percent drop in the Footsie.
EU urged to block Vodafone-Liberty deal
Reuters reported yesterday that the BREKO business group had said that Vodafone’s deal to buy Liberty Global’s German operations would create a duopoly between the UK group and Deutsche Telekom, delay the work on building a nationwide fibre-optic network and blunt competition in the cable TV market.
“The EU Commission must block the planned takeover, because mergers that hinder effective competition aren’t compatible with the law,” BREKO chief Stephan Albers said in a statement, as quoted by the newswire.
The EU antitrust regulator has set a November 27 deadline for its review of the deal, and can either clear it with or without concessions, or open a full-scale investigation if the companies fail to address its concerns.
JPMorgan lowers UK telco’s price target
In a separate development, Proactive Investors reported yesterday that JPMorgan Cazenove had trimmed its price target on Vodafone from 255p to 240p. The newswire quoted the analysts as saying that they believed the company’s fortunes now rested on its ability to cut costs rather than in top-line growth.
The broker reckons that asset sales could help alleviate the risks associated with the high debt ratio, suggesting non-core European units as potential targets as well as Australian, New Zealand, and Indian assets. JPMorgan added that in the absence of the above options, it would argue for a dividend cut as the structural benefits would ‘far outweigh’ the headline risk.