iNVEZZ.com, Friday, January 3: Vodafone is said to be considering a bid for India’s Tata Teleservices in a move that would make it the biggest mobile phone company in India. According to the news, first reported by The Economic Times today, the British mobile carrier is in early stage discussions with Tata Teleservices’ parent Tata Group. A potential hurdle to the deal could come from Japanese company DoCoMo, which holds about one fourth of Tata Teleservices’ shares and has the right of first refusal.
In today’s trading, Vodafone shares were down 0.4 percent at 236.30p as of 13:15 UTC. Meanwhile, shares in Tata Teleservices Maharashtra, a subsidiary of the unlisted Tata Teleservices, surged on the news and closed some 10 percent up at 8.41 rupees in Mumbai.
Tata Group owns 59.45 percent of Tata Teleservices, which means that an eventual deal will grant Vodafone control of the company. The Indian carrier commands 7.3 percent of the country’s mobile phone market, which combined with Vodafone’s 17.9 percent share will be enough to surpass Bharti Airtel, India's biggest operator by subscribers.
"Discussions are at an early stage. It is difficult at this stage to say what the outcome of these talks will be," said a person aware of the development, as quoted by the Economic Times.
According to two unnamed sources cited by the Economic Times, Vodafone wants to buy out Tata Teleservices entirely and would be looking to make offers to DoMoCo and other shareholders in the company.
Vodafone recently received a huge influx of cash thanks to the $130 billion sale of its stake Verizon Wireless, the biggest US mobile carrier, and is looking to spend part of the proceeds on acquisitions to expand its European and emerging markets operations. According to reports, the company is eying assets in Southern Europe and is also considering a deal with BSkyB to offer a range of services in the UK.
As of 14:13 UTC buy Vodafone shares at 236.30p
As of 14:13 UTC sell Vodafone shares at 236.20p
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