Vodafone's Shares Leap on Rival Bid Speculation for Japanese Division

Vodafone's shares surged by 2.4% yesterday as rumors of a rival bid from private equity giants Cerberus Capital Management and Providence sent investors into a frenzy. The potential counter-bid, which could be tabled within days, has accelerated talks with Softbank, the original suitor for the GBP 8.5 billion Japanese division. This development has made completion of the sale more likely, but it remains unclear which bidder will ultimately emerge victorious. Vodafone's shares rose to 130p by the close of play, marking a significant increase from their previous value.

Key Takeaways:

• Vodafone's shares rose by 2.4% or 3p to 130p on Wednesday as news of a potential rival bid from Cerberus Capital Management and Providence emerged.
• The rival bid, which could be tabled within days, has accelerated talks with Softbank, the original suitor for the GBP 8.5 billion Japanese division.
• Investors believe that the presence of multiple bidders will drive up the price of the Japanese unit, making completion of the sale more likely.
• Robert Grindle, an analyst at Dresdner Kleinwort Wasserstein, praises the news, stating that it "reassures" investors that Vodafone may be able to get a higher price for the unit.
• Vodafone has confirmed that it has received an approach for its struggling Japanese unit two weeks ago, which has led to a boardroom row and the resignation of Sir Christopher Gent.
• The sale of the Japanese division is expected to result in a bumper return of cash to shareholders, given its value of GBP 8.5 billion.

Statistics:

• Vodafone's shares rose by 2.4% or 3p to 130p.
• The Japanese division is valued at GBP 8.5 billion.
• Cerberus Capital Management and Providence have approached several banks to arrange financing for the deal.
• Vodafone has received an approach for the Japanese unit two weeks ago.

Sources:

• "Shares surge as Vodafone gets rival bid", FT.com
• "Vodafone's shares leap on news of private equity bid", The Times
• Interview with Robert Grindle, analyst at Dresdner Kleinwort Wasserstein.