Vodafone's Japanese Business Sparks $15.8 Billion Bidding War
A Pounds 9bn ($15.8bn) bidding war has erupted over Vodafone's planned sale of its Japanese business, with Cerberus and Providence Equity Partners joining forces to challenge the mobile phone operator's negotiations with SoftBank. The move has strengthened the hand of Arun Sarin, Vodafone's chief executive, and is expected to improve the price Vodafone can command from the disposal.
Key Takeaways:
- Cerberus and Providence Equity Partners have joined forces to mount an all-cash bid for Vodafone Japan, valued at Pounds 9bn ($15.8bn).
- The bid is part of a Pounds 9bn ($15.8bn) bidding war with Cerberus competing against a team led by Kohlberg Kravis Roberts (KKR) for Japan's third-largest mobile operator.
- Cerberus's interest could force the price of SoftBank's offer towards the top of the expected Y1,700bn-Y2,000bn (Dollars 14.5bn-Dollars 17.1bn) range, according to Robert Grindle of Dresdner Kleinwort Wasserstein.
- Vodafone would require vendor financing, taking loan notes or preference shares, to pull off the SoftBank transaction.
- Shareholders would prefer a clean break, which could favor a bid from Cerberus, according to James Barford of Enders Analysis.
- The partnership arrangements for a potential consortium deal involving KKR, Texas Pacific, or Permira might remain fluid for some time.
Statistics:
- The value of the bidding war: Pounds 9bn ($15.8bn)
- The expected price range for SoftBank's offer: Y1,700bn-Y2,000bn (Dollars 14.5bn-Dollars 17.1bn)
- The percentage stake in Vodafone Japan to be sold: 97.7%
- The value of the Japanese market for private equity deals: To be determined
Sources:
- James Barford, Enders Analysis
- Robert Grindle, Dresdner Kleinwort Wasserstein
- Arun Sarin, Vodafone CEO
- SoftBank
- Vodafone
- JPMorgan
- Morgan Stanley
- Deutsche Bank
- Goldman Sachs
- Mizuho
- Kohlberg Kravis Roberts
- Texas Pacific
- Permira
- Andrew Edgecliffe-Johnson, Michio Nakamoto, Tokyo and London Financial Times.