Deutsche Bank reiterated its Buy rating on Vodafone Group (LSE:VOD) with a 150p price target, implying substantial upside on the stock's last close of 110.1p, after Emirates Telecommunications Group (e&) agreed to sell its entire 16.2% stake to Vega, an acquisition vehicle wholly owned by the family group of French telecoms entrepreneur Xavier Niel.
Analyst Robert Grindle framed the transaction as a positive development for the UK-based mobile and broadband operator, pointing to the pricing of the deal as a signal of the stake's underlying value.
The 3.9 billion shares change hands at 112.5p, including a 2.02p final dividend payable at the end of July, and will generate €4.4 billion in proceeds for e&; the shares will be placed off-market in blocks to financial institutions holding on Vega's behalf, and the ex-dividend price of 110.5p sits 13% above Vodafone's last close.
Grindle's note comes as Vodafone works through the £4.3 billion cash purchase of CK Hutchison's remaining stake in VodafoneThree, with the shareholder transition adding a new ownership dynamic for brokers to track alongside that integration.
