Vodafone slumps as Liberty Global talks end

Vodafone shares slumped on Monday after the company said it is no longer in discussions with Liberty Global regarding a possible exchange of selected assets between the two companies.

Vodafone had confirmed on 5 June that it was in the early stages of discussions with Liberty.

Liberty, which is owned by cable network Virgin Media and controlled by US billionaire John Malone, had been in talks with Vodafone for several months about the possible combination of their mobile and cable network in European markets, in order to better compete with rivals.

However, in an interview with Bloomberg in mid-September, Malone said the companies remained deadlocked over how to successfully create value that both sides agreed was there.

Mike van Dulken, head of research at Accendo Markets, said: “News that US cable operator Liberty Global has terminated talks over a proposed asset swap may dampen an attractive M&A element but the prospect of it being merely a delay and bump on the road to a deal may mean negativity is only short-term.”

He added that Vodafone could be in prime territory to benefit from a revival of talks and the recent bargain-hunting seen among fellow battered blue-chips.

“A recent bounce may have been scuppered by today’s news, however, the resulting weakness may simply offer another opportunity to dial in to the wave of consolidation that has been sweeping through the European television and communications sector in recent years.”

At 0840 BST, Vodafone shares were down 3.4% at 210.35p.