Case study on Vodafone

Jul 8th, 2015
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Kansas State University
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Vodafone has surrendered any right to decide its destiny after a decade of "incompetence" and "failure" and should put itself up for sale, a leading Australian hedge fund boss said on Wednesday. In a searing critique of the British mobile giant's global empire, John Hempton of Bronte Capital has called for the board to be sacked if it sells the company's most precious asset, a 45% stake in the leading US carrier Verizon Wireless. The holding could be worth $115bn (£75bn) to Verizon Communications, the fixed-line phone company which owns the other 55%, and there has been speculation Vodafone could cash in and spend the money on European expansion.

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Vodafone has surrendered any right to decide its destiny after a decade of "incompetence" and "failure" and should put itself up for sale, a leading Australian hedge fund boss said on Wednesday.In a searing critique of the British mobile giant's global empire, John Hempton of Bronte Capital has called for the board to be sacked if it sells the company's most precious asset, a 45% stake in the leading US carrier Verizon Wireless.The holding could be worth $115bn (75bn) to Verizon Communications, the fixed-line phone company which owns the other 55%, and there has been speculation Vodafone could cash in and spend the money on European expansion.In a widely read blogpost on Wednesday, Hempton said selling Verizon would mark out "an important part of the British business establishment" as "both venal and incompetent".He added: "With the demonstrated record of failure of Vodafone over the past decade, Vodafone has surrendered its right to make a deal any deal which leaves management to squander the proceeds from the best asset they have the only asset they did not manage."Bronte's third-largest shareholding is Vodafone and it has taken a long hedge position on the stock, which means it assumes the share price will rise. It would prefer either no deal, or for Verizon to buy the British company outright because selling just the US business would incur a huge tax bill.Analysts at Bernstein Research tentatively estimate the tax bill on any Verizon windfall w

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