HomeStockUAE telecoms group e& buys 9.8% stake in Vodafone for $4.4 billion...

UAE telecoms group e& buys 9.8% stake in Vodafone for $4.4 billion By Reuters



© Reuters. The Vodafone brand is seen on the Cell World Congress in Barcelona, Spain, February 28, 2018. REUTERS/Sergio Perez/File Picture

By Saeed Azhar and Kate Holton

DUBAI/LONDON (Reuters) -United Arab Emirates-based telecoms firm e& has purchased a 9.8% stake in Vodafone (NASDAQ:) for $4.4 billion, days after saying it was seeking to increase into new markets and associated areas akin to monetary expertise.

E&, previously referred to as Emirates Telecommunications Group, mentioned it had made the funding to realize “vital publicity to a world chief in connectivity and digital companies”, including it had no intention of constructing a proposal for the entire of Vodafone.

Vodafone, like different cell operators, has been struggling in its extra mature markets, the place competitors and regulation have pushed costs decrease.

Internet debt on the group has reached 44.3 billion euros ($46.1 billion) and Chief Govt Nick Learn is beneath stress to simplify its portfolio and enhance returns after a greater than 20% slide in its share worth since he took over in 2018.

Vodafone mentioned it regarded ahead to constructing a long-term relationship with e&. “We proceed to make good progress with our long-term strategic plans and can present an replace in our FY22 outcomes announcement on 17 Might,” it mentioned in an announcement.

E& mentioned it’s totally supportive of the corporate’s present enterprise technique and its board and present administration crew.

“We see this funding as a very good alternative for e& and its shareholders as it should enable us to reinforce and develop our worldwide portfolio, consistent with our strategic ambition,” mentioned CEO Hatem Dowidar.

The UAE agency not too long ago separated its enterprise into e& life, targeted on shopper companies, e& enterprise, offering digital companies to authorities and enterprise, and telecoms arm Etisalat, which its CEO mentioned is the world’s seventh-largest by market capitalisation.

“We’re constructive on the funding for e& – it permits an improved capital construction, helps EPS (earnings per share) development, (and) arrives at engaging valuation multiples,” mentioned Ziad Itani, govt director fairness analysis at Arqaam Capital.

Whereas the funding is sizable, it’s lower than 6% of the market capitalisation of e&, which additionally has a wholesome steadiness sheet with web debt/EBITDA at 0.41 occasions, he mentioned.

($1 = 0.9605 euros)

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