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E& gets pushy with Vodafone

E& has reportedly further increased its stake in Vodafone and is now looking to make changes at the telco group's board.

Mary Lennighan

April 25, 2023

3 Min Read
Vodafone

E& has reportedly further increased its stake in Vodafone and is now looking to make changes at the telco group’s board.

The United Arab Emirates-based operator has raised its holding in the UK-based telecoms group to 14.6%, Bloomberg reports, citing a regulatory filing.

That’s just a small hike on the firm’s previous 14% stake, a position it built up in increments since its first share acquisition back in May last year. But at around US$450 million per percentage point, it’s not a small sum to commit. We don’t have a value for any new transaction, incidentally; that figure is based on e&’s initial Vodafone foray eleven months ago. Vodafone’s share price has continued to slide in the interim, so the numbers could well look different now. Nonetheless, e& is clearly not afraid of throwing more cash at Vodafone, presumably attracted by that subdued stock price.

But more than that, this latest deal shows that e& is keen to exert some sort of influence over Vodafone.

According to the newswire, e& opened discussions with Vodafone earlier this month about its non-executive directors; essentially, it’s pushing for change at board level, presumably with a view to gaining influence in its own right. There has been no formal comment on that assumption from either side though. It points out that two of Vodafone’s non-executive directors, Clara Furse and Crispin Davis, could well step down this year having each served a nine-year term, the maximum recommended under the UK’s corporate governance code. Perhaps e& is seeing a handy opening.

It might well not be the only one. E& is one of a few big names to have bought into Vodafone of late, Liberty Global and Xavier Niel’s Atlas Investissement being the most noteworthy of the others. It would not be a surprise to see either of those shareholders seek to exert more control over the troubled, leaderless telco in the not-too-distant future.

E& recently dismissed the idea of making a takeover bid for Vodafone, but its latest move suggests it is not simply buying up cheap shares to make a quick buck either.

“The pursuit of board representation by Vodafone’s largest shareholder e&, while expected given its growing 14.6% stake, is a positive move in light of e&’s plan to be a long-term investor in the carrier, making further stakebuilding likely,” the newswire quoted Bloomberg Intelligence analyst Erhan Gurses as saying. “The Emirati company’s push is a change from its original position, suggesting it may become a pro-active force to ensure execution aligns with its long-term strategy.”

So it seems we can expect e& to throw more cash at Vodafone and work harder to make its voice heard.

Given that the telco has been without a permanent chief executive since Nick Read stepped down late last year, and that as a result its M&A opportunities in the UK and possibly elsewhere appear to be on ice, it’s probably just as well that someone is taking an interest.

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About the Author(s)

Mary Lennighan

Mary has been following developments in the telecoms industry for more than 20 years. She is currently a freelance journalist, having stepped down as editor of Total Telecom in late 2017; her career history also includes three years at CIT Publications (now part of Telegeography) and a stint at Reuters. Mary's key area of focus is on the business of telecoms, looking at operator strategy and financial performance, as well as regulatory developments, spectrum allocation and the like. She holds a Bachelor's degree in modern languages and an MA in Italian language and literature.

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