Emirates Telecommunications Group Company PJSC (e&), based in Abu Dhabi and formerly known as Etisalat Group, announced that it has increased its stake in Vodafone (NASDAQ: VOD) to a cumulative 11 percent of Vodafone’s 2.74 billion outstanding shares. Vodafone’s share price at the stock market close on Tuesday was $10.86 down nearly 2 percent from the previous day’s close.
The transaction was handled through e&’s wholly owned subsidiary, Atlas 2022 Holdings Limited, that was established solely for the purpose of holding the shares in Vodafone. The rationale of e&’s investment in Vodafone is unchanged from its original $4.4 billion investment in Vodafone in May. e&’s objective is to gain significant exposure to a world leader in connectivity and digital service at an attractive valuation.
This investment is timely and indicates confidence in Vodafone’s future, particularly in light of this week’s announcement that Nick Read, Vodafone’s Group CEO, will step down at the end of December, as Inside Towers reported.
e& made clear, however, that it does not intend to make an offer to take over Vodafone. That said, Bloomberg reports that e& is studying the feasibility of an offer for part or all of Vodafone’s stake in Johannesburg-listed Vodacom Group Ltd. Vodafone owns roughly 60 percent of Vodacom.
e& is also weighing the possibility of combining some of its own African operations with Vodacom or buying Vodacom assets in specific countries, Bloomberg reported. No formal course of action has been announced,
For the first six months of its fiscal year 2023 ending September 30, Vodafone reported service revenues grew 2.5 percent year-over-year to $19.9 billion but Adjusted EBITDAL declined 2.6 percent to $7.6 billion over the same period. Capital expenditure for the period increased by 5 percent to $3.7 billion.
On September 30, Vodafone had nearly 67 million wireless customers and 26 million broadband connections in Europe, and 188 million wireless users in Africa.
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