Latest news with #VodafoneSpain
Yahoo
3 days ago
- Business
- Yahoo
Spain's $5B Telecom Breakup? Telefonica and Masorange Plot Bold Move on Vodafone
Telefonica (NYSE:TEF) and Masorange have kicked off informal discussions about a potential deal for Vodafone Spain, according to people familiar with the matter. While nothing is on paper yet, insiders say one idea being explored involves splitting up Vodafone Spain's fixed-line and mobile or enterprise operationspossibly to dodge antitrust objections. Masorange could also take over the Lowi brand, Vodafone's low-cost unit. The backdrop? Pressure is mounting in Spain's crowded telecom market, and consolidation is starting to look like the only way out. Warning! GuruFocus has detected 9 Warning Signs with TEF. Masorange, formed in 2024 from the 18.6 billion merger between Masmovil and Orange's local business, is now the country's biggest operator by customer base. Vodafone Spain, meanwhile, was acquired by Zegona for 5 billion last year but has continued to strugglepartly due to an aging fiber-optic network. It's already working with Masorange on a fiber venture, but a broader breakup-and-buyout could redraw Spain's telecom map. Telefonica still dominates business services, but Chairman Marc Murtra has made it clear: Europe's telecom players need to bulk up or risk getting left behind. But even if the strategic logic lines up, execution won't be easy. Telefonica's credit rating is hanging at the edge of investment-grade, leaving little room for risky moves. Murtra has said he won't jeopardize that rating, though some sources say creative funding structures might still be possible. A throwback to the 2020 Brazil playbookwhere Telefonica and two rivals jointly carved up Oi SAcould help navigate regulatory obstacles. For now, there's no formal proposal, but if talks progress, this could become one of the boldest moves in European telecom in years. This article first appeared on GuruFocus. Sign in to access your portfolio
Bloomberg
3 days ago
- Business
- Bloomberg
Telefonica, Masorange Said to Hold Early Talks on Vodafone Spain
Telefonica SA and Masorange have held informal talks on a potential deal for Vodafone Spain, people familiar with the matter said, a move that could lead to further consolidation in the country's telecom market. One of the possible scenarios being explored would be to break up Vodafone Spain's fixed-line and its mobile or enterprise operations, due to possible antitrust issues, the people said. MasOrange could also potentially take over Vodafone's low-cost brand Lowi, one of the people said, asking not to be identified as the information is private.
Yahoo
16-02-2025
- Business
- Yahoo
Here's the dividend forecast on Vodafone shares through to 2027!
Last spring, Vodafone (LSE:VOD) bowed to what many considered to be inevitable and cut the dividend on its shares. The FTSE 100 firm announced plans to cut the annual dividend for this financial year (to March 2025) by a whopping 50%. It said the decision to rebase cash rewards 'at a sustainable level…. ensures appropriate cash flow cover and sufficient flexibility to invest in the business for growth'. While disappointing to income investors, Vodafone sought to soothe the blow by pledging share buybacks and stressing its 'ambition to grow [dividends] over time'. So should I consider buying Vodafone shares for a passive income? Financial year ending March Predicted dividend Dividend yield 2025 4.5 euro cents 5.2% 2026 4.2 euro cents 4.9% 2027 4.3 euro cents 4.9% As the table shows, dividends are tipped to fall again next year before rising modestly in financial 2027. But on the plus side, the dividend yields on Vodafone shares still surpass the FTSE 100 average of 3.5%. But how realistic are current forecasts? The first thing to look at is dividend cover, for which I'm seeking a figure of two times or above for a wide margin of error. Vodafone doesn't score highly here for this year, even after the planned debasement. Cover is just 1.4 times. In better news, dividend cover rises to a sturdy 1.9 times and 2.1 times for financial 2026 and 2027, respectively. Given the company's still-high debts, this improvement is essential to me as a potential dividend-seeking investor. As of September, Vodafone's net debt was €31.8bn. This debt is still higher than I'd be looking for. However, free cash flow remains robust (this is tipped at €2.4bn or above for financial 2025). And the business is taking a proactive approach steps to slash borrowings. Offloading Vodafone Spain helped bring net debt down by around a billion and a half euros in six months. Vodafone Italy's sale in December has been used to reduce the total still further, Vodafone says. The business is also undergoing significant restructuring to mend the balance sheet. Its decision this month to buy another €480m worth of shares underlines the confidence it has that things are going to plan. When it comes to future dividends, there are less risky passive income shares for investors to choose from. Vodafone's debts are still high, and its operations remain as capital-intensive as ever. Vodafone also continues to struggle in its biggest market. While group service revenue growth accelerated to 5.2% in quarter three, the decline in Germany worsened to 6.4%. But while I wouldn't buy Vodafone shares just on the basis of near-term dividends, I think it could be a top stock to own for its overall long-term outlook. As with other telecoms shares, I think earnings and dividends could rise strongly over the long term as the digital economy continues to grow. I also like its vast exposure to African markets where demand for data and mobile money services is booming. Organic service revenues here leapt 11.6% in quarter three. Finally, its tie-up with Three provides tantalising sales opportunities and the possibility to get costs further under control. Given its low price-to-earnings (P/E) ratio of around 10 times, I think Vodafone's shares are worth serious consideration. The post Here's the dividend forecast on Vodafone shares through to 2027! appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Vodafone Group Public. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Sign in to access your portfolio
