Vodafone CEO Gains Potential Ally With e&’s $4.4 Billion Stake - Bloomberg
Vodafone Group Plc shares halted their month-long slide after Emirates state-backed telecom firm e& bought a surprise 9.8% stake on Saturday, becoming the group’s largest shareholder.
The sudden arrival of Emirates Telecommunications Group Company PJSC -- now known as e& -- could tilt the scales in a growing debate about the phone group’s strategy. Vodafone Chief Executive Officer Nick Read is trying to consolidate in key markets while facing pressure from shareholders including Europe’s largest activist fund, Cevian Capital AB.
A wealthy, supportive shareholder could give Read cover to reset expectations around investment and profits by supporting the share price, Jefferies analyst Jerry Dellis said. That could give him greater freedom to spend to upgrade its network -- such as building fiber over and around Vodafone’s cable footprint in Germany.
“We expect e& to counteract activist pressure, not add to it,” said Dellis in a note to clients. He noted e&’s CEO Hatem Dowidar previously worked at Vodafone for 17 years, including with Read.
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