Bidders to Dial Into Vodafone?

March 13, 2006 - source: BWCS

Rumours are circulating in the City of London this morning that at least two influential private equity groups are preparing a bid for control of Vodafone. The UK-based mobile giant, which is seen as cash generative, is currently valued at £75 billion, but the bidders may be prepared to pay up to £100 billion for control. CVC Capital Partners and Apax Partners are the two companies said to be linked to a potential takeover.

The news comes amidst reports of managerial bust-ups and the announcement at the weekend that Chris Gent, former head of Vodafone, will be standing down from his position as honorary president. The move was seen by many as an attempt to quash rumours of a boardroom split at the mobile giant.

This morning, company chairman Lord MacLaurin, felt compelled to issue an extraordinary statement saying that he fully supported his CEO, Arun Sarin. This was clearly in response to newspaper reports that he was trying to have Sarin shown the door after a string of disappointing results. Lord MacLaurin said he was "totally supportive" of Sarin, adding that he had read media reports of a rift with "great concern".

Meanwhile, the company is said to be close to selling its troubled Japanese arm, Vodafone KK, to a domestic Japanese ISP, Softbank, although reports this morning indicate that US venture capitalists may also bid for the company. Softbank is expected to pay around US$15 billion for Vodafone KK.

In the US itself, it is known that Verizon Wireless is keen to buy Vodafone's minority stake in its own business. According to reports as much as £22 billion may be on offer for Vodafone's 40% share in Verizon Wireless.