Vodafone CEO Denies Buying Spree

Seeks to reassure investors after bidding billions in an unsuccessful attempt to take over AT&T Wireless.
Ed ZwirnFebruary 23, 2004

Arun Sarin, chief executive of mobile phone giant Vodafone Group Plc, made an “impassioned” speech during a conference call to assuage market concerns, Reuters reported.

Last week Vodafone was outbid by Cingular in an intense two-way battle for AT&T Wireless. During the call, Sarin reportedly ruled out any bid for U.S. rivals Sprint or Nextel or any “imminent” deal for control of French joint venture SFR. He also conceded that an unsolicited takeover of Vodafone’s U.S. joint-venture partner, Verizon Communications, would destroy value.

Vodafone, the world’s largest mobile phone company by revenue, has been under pressure to define its strategy after unsettling investors by bidding for AT&T Wireless, which Cingular won with a $41 billion cash offer. Sarin said that the top price Vodafone would have paid would have reduced earnings per share by less than 10 percent in the first year. But he declined to divulge his top bid or to detail the exit deal he had struck with Verizon if Vodafone had won the auction, according to the report.

Sarin also has defended himself against criticism that he was prepared to go too far to win AT&T Wireless. On presentations Thursday at Vodafone bankers UBS and at Goldman Sachs, added Reuters, he said that the ceiling price for AT&T Wireless would have been earnings neutral in three years and free-cash-flow-positive from year one.

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