Vodafone in $11bn Australian merger

[idpickering]

Vodafone's Australian operations will become part of a new telecoms giant in a A$15bn merger announced on Thursday.

Combining Vodafone Hutchison Australia and TPG Telecom will create a mobile, fixed-line and broadband provider with the scale to rival Telstra and Optus.

Vodafone Australia, owned by Hong Kong-based CK Hutchison and Vodafone Group, will have a majority 50.1% stake.

TPG will hold the remainder of TPG Telecom Limited, which will be listed on the Australian Securities Exchange.

https://www.bbc.com/news/business-45349133

Also; VODAFONE GROUP ANNOUNCES MERGER BETWEEN VHA AND TPG

Vodafone Group Plc ("Vodafone") announces that Vodafone Hutchison Australia Pty Limited ("VHA") and TPG Telecom Limited ("TPG") have agreed a merger to establish a new fully integrated telecommunications operator in Australia ("MergeCo").



The merger brings together leading talent in Australia's mobile and fixed broadband sectors and accelerates the benefits of the substantial network investments made by both companies. The merged company will be a more powerful challenger to Telstra and Optus in Australia, with an integrated fixed and mobile offering. It will also be better able to invest in next generation mobile and fixed networks and drive innovation, service and product improvements to benefit Australian telecoms customers.

https://www.investegate.co.uk/vodafone- ... 00152005Z/

[funduffer]

Share price down more than 2% so far this morning.

[IanTHughes]

Share price down more than 2% so far this morning.

Just noise .....

...... and not even very loud

Ian

[idpickering]

Just noise .....

...... and not even very loud

Ian

Agreed, and in a falling market too.

Ian.

[monabri]

"The Australian deal was welcomed by investors, but Vodafone shares sank more than 3pc to their lowest level in more than five years years, following a downgrade by analysts at Bank of America Merrill Lynch (BAML). The analysts cited fears over Vodafone’s dividend as it takes on new debt and faces rising competition in Italy and Spain."

From the Telegraph.

https://www.telegraph.co.uk/business/20 ... an-merger/

[Wizard]

"The Australian deal was welcomed by investors, but Vodafone shares sank more than 3pc to their lowest level in more than five years years, following a downgrade by analysts at Bank of America Merrill Lynch (BAML). The analysts cited fears over Vodafone’s dividend as it takes on new debt and faces rising competition in Italy and Spain."

From the Telegraph.

https://www.telegraph.co.uk/business/20 ... an-merger/

My bold.

There is the central issue with Vod, can that dividend survive into the future? For me the risk is too high, so I will not be buying any Vodafone in the short term.

Terry.

[moorfield]

I can't read the full article, so may I ask - have the "analysts" qualified their opinion with even a cursory look at the cashflow statements, or are they relying on nebulous facts such as "rising competition" ? As far as VOD is concerned, I'm sticking to Depeche Mode's advice for the long term.

[idpickering]

There is the central issue with Vod, can that dividend survive into the future? For me the risk is too high, so I will not be buying any Vodafone in the short term.

Terry.

Me neither Wizard, although I have spent enough on their shares already. A disappointing investment, and the dividend is the saving grace IMHO. A hold for me.

Ian.

[cshfool]

Moorfield was it this advice from Depeche mode?

"Nothing's going to save us from the big drop" - verse 1 "Leave in Silence?"

csh

[monabri]

I doubt it was " I just can't get enough!"

[YeeWo]

I'm sticking to Depeche Mode's advice for the long term.

A Policy if Truth? Just can’t get enough? Don’t recall Depeche Mode giving long term invesment advice! What am I missing?(!!!).

[idpickering]

I doubt it was " I just can't get enough!"

After all, "People Are People", which I bought many moons ago.

Ian.

[Wizard]

I see Vod is down again today, plumbing new depths and at a more than 5 year low. With a yield above 8% this is either a blinding bargain or in what others have described as "too good to be true" territory.

Terry.

[idpickering]

I see Vod is down again today, plumbing new depths and at a more than 5 year low. With a yield above 8% this is either a blinding bargain or in what others have described as "too good to be true" territory.

Terry.

I mentioned further up this thread that I'd spent enough on VOD already, but I have to admit the current demise of it's share price is tempting for a long term hold. I took advantage of the weak Shell RDSB share price in 2016, so I have form for bargain hunting. I'll Pickering it over some more, but my next scheduled purchase in my ISA isn't until 22 Sep 18, by which time I might've missed the boat anyway. Either way, I'm not going to lose sleep over this, or VOD.

Ian.

[Darka]

As a not very practical exercise, I sometimes like to think ahead to the far future (Blade Runner era for example).

I try to imagine what company logo's I might see advertised along the neon boardwalks, etc. and I'm pretty sure we'll be seeing Vodafone, Shell, BP and many of our favourites long into the future.

And yes I know this is silly, but why not have a bit of fun with it, just as accurate a forecast as any other

So, although things aren't looking too rosy for Vodafone at the moment, I do think they will turn around and today's price could be a bit of a bargain.

[Gengulphus]

As a not very practical exercise, I sometimes like to think ahead to the far future (Blade Runner era for example).

I try to imagine what company logo's I might see advertised along the neon boardwalks, etc. and I'm pretty sure we'll be seeing Vodafone, Shell, BP and many of our favourites long into the future.

And yes I know this is silly, but why not have a bit of fun with it, just as accurate a forecast as any other

So, although things aren't looking too rosy for Vodafone at the moment, I do think they will turn around and today's price could be a bit of a bargain.

Do take account of the fact that brand names can become completely independent of their parent companies, and even survive their parent companies going bust. So you could turn out to be wrong about your last paragraph even if you turn out to be completely correct about everything before it...

That's not a prediction, by the way, just a possibility to take into account.

Gengulphus

[moorfield]

I see Vod is down again today, plumbing new depths and at a more than 5 year low. With a yield above 8% this is either a blinding bargain or in what others have described as "too good to be true" territory.

VOD isn't quite at 2x my benchmark yield (8.1% vs CTY, 4.2%), above which I would exclude it from further top-ups (what I didn't do with CLLN, what I am now doing with CNA). It's a long term hold and I don't really see a convincing alternative from the telecoms industry - BT, Talk Talk, or Inmarsat? No thanks.




(The answer btw was indeed: "I just can't get enough". Although VOD is now at my portfolio limit of 10% income, so I won't be topping-up for the forseeable anyway.)