By Kate Holton
LONDON (Reuters) – Vodafone shares rose as much as 4.5% earlier on Monday after news that activist investor Cevian Capital had bought an undisclosed stake in the mobile phone group to encourage it to lead a movement. consolidation in Europe.
Analysts and investors saw the move as positive, after the British company’s shares languished during the two years of the pandemic, pressured by competition in markets such as Italy, Spain and Portugal.
Chief Executive Nick Read, a former chief financial officer who has held the company’s highest position since October 2018, called for more consolidation in Europe and said he was willing to pursue merger opportunities for its Vantage Towers infrastructure.
Read has completed 19 transactions, with a focus on Europe and Africa.
The Financial Times said Cevian, Europe’s biggest activist fund, wants Vodafone to be more aggressive in driving consolidation in markets such as Spain, Italy and the UK.
Reuters reported earlier this month that Vodafone and Iliad were in talks to combine their businesses in Italy.
Bloomberg first reported on Cevian’s move. Both Vodafone and Cevian declined to comment.
“Unless drastic steps are taken to reshape Vodafone, the action looks set to continue to underperform the FTSE 100 at a time when the UK market looks increasingly attractive from a valuation perspective, having shown has underperformed other global indices since Brexit,” said Victoria Scholar, head of investment at Interactive Investor.
((Reporting by Kate Holton))
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