AT&T rules out Vodafone bid for now
By Kate Holton and Sophie Sassard
LONDON (Reuters) - AT&T on Monday ruled out a bid for Britain's Vodafone after Britain's takeover watchdog asked the U.S. phone company to clarify its position following reports that it had sounded out European regulators on the prospects of a merger.
AT&T's statement means it cannot make an offer for Vodafone for at least six months, unless the British company invites it to do so or a third party enters the fray.
Banking sources said that while an uproar over the U.S. National Security Agency's electronic surveillance program and a year-long rally in European telecom shares may have disrupted prospects for a deal any time soon, many think it could still happen.
AT&T, the second-largest U.S. mobile operator, had sparked speculation it could be interested in a potentially 70 billion pound-plus ($115 billion) deal for Vodafone after its CEO said in October there was a "huge opportunity" in Europe to invest in mobile broadband.
AT&T Chief Executive Officer Randall Stephenson met European Union telecoms chief Neelie Kroes at the World Economic Forum in Davos, Switzerland, last week, according to a person familiar with the matter, who said they discussed high-speed wireless and cross-European opportunities as well as the NSA spying scandal, but did not talk about any specific deals. AT&T declined to discuss Stephenson's Davos meetings.
Vodafone's shares fell as much as 7 percent before ending down 3.9 percent at 224.78 pence as some investors had hoped that a deal process could start as early as February. AT&T's stock was up 0.9 percent at $33.73.
Analysts also said a deal could still make sense for AT&T, which is facing a more competitive home market even as Europe could soon benefit from economic recovery and investment in high-speed mobile services that trail behind the United States'.
"I don't think this signals the end of AT&T's interest in Europe," said Atlantic Equities analyst Chris Watts. Continued...