Hard on the heels of news of its increased stake in African giant Vodacom, the Vodafone Group has responded dismissively to rumours that it is considering a partial or total sale of the company.
Early this week we heard that Vodafone now owns 65.1% of the South Africa-based operator. This was after Vodacom said it had issued 241.9 million new shares to Vodafone as part of Vodacom's acquisition of a 55% interest in Vodafone Egypt.
However, Bloomberg has reported in the last two days that Vodafone is exploring ways to extract more value from its holding in Vodacom.
Unnamed sources have alleged that a number of strategies have been mooted, including divesting some assets in certain markets, merging the business with other operators or selling a stake in the company.
In fact Etisalat, which is Vodafone’s largest shareholder, has reportedly been studying the possibility of buying Vodafone’s stake in Vodacom or merging its own African operations with Vodacom.
Driving these rumours has been a fall in the market value of Vodafone, a number of asset sales, the departure of CEO Nick Read late last year, and an adverse response from activist investors to Vodafone’s poor performance.
However, Vodafone, which has lomg seen the African unit as a core part of the group, has issued the following statement: “Vodacom is a strong business that is an important part of Vodafone. There are no discussions ongoing in relation to a potential sale.”
Although the value of Vodacom itself has fallen over the past year, in its latest trading update Vodafone highlighted the fact that Vodacom is enjoying increased data usage and strong demand for mobile financial services.
