Skip to content

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Could Vodafone shares benefit from activist investor shakeup?

Vodafone has rebuffed a bid for its Italian arm and is facing pressure from an activist shareholder. Are the shares worth buying into?

Source: Bloomberg

Vodafone shares are down 2% to 137.7p after the company rejected a bid for its Italian arm. French telecoms provider Iliad made an unsolicited offer for the business this week, reportedly offering €11bn (£9.2bn) for Vodafone Italy. The firm, run by French billionaire Xavier Niel, is backed by private equity group Apax Partners and the offer valued the business at seven times earnings before interest, tax, depreciation and amortisation (EBITDA).

The mobile phone giant said it had rebuffed the “preliminary indication of interest” as it believed it was “not in the best interests of shareholders.” It told investors that management remains “focused on delivering shareholder value through a combination of its organic growth strategy over the medium-term and ongoing portfolio optimisation.” It says it is “pragmatically [pursuing] several value accretive in-market consolidation opportunities to deliver sustainable market structures in its major European markets, including Italy.”

In a statement suggesting that the suitor won’t be upping its offer any time soon, Iliad said that it would now “pursue its stand-alone strategy”.

Pressure from activist investor Cevian could drive telecoms consolidation

Like a number of its FTSE100 peers, including Unilever and GlaxoSmithKline, Vodafone is facing pressure from an activist investor – in this case, Cevian Capital – which has built up a stake in the company and wants a shake-up of the business. The Swedish vehicle is backed by long-time activist investor Carl Icahn and is believed to be pushing for more consolidation within the mobile phone industry, focusing particularly on the UK, Spain and Italy.

At the third-quarter trading update last week, Vodafone's chief executive Nick Read said that the company is already looking for merger opportunities in its European markets, bolstered by what it hopes is a more benign regulatory environment.

“We remain focused on our operational priorities to strengthen commercial momentum in Germany, accelerate our transformation in Spain and position Vodafone Business to maximise EU recovery funding opportunities,” he told investors. “We are also committed to creating value for our shareholders through proactive portfolio actions and continuing to improve returns at pace."

As well as a change of strategy, Cevian is also thought to be pushing for changes to the board, which has many famous names on it, such as former London Stock Exchange boss Dame Clara Furse and ex-Reed Elsevier chief Sir Crispin Davis, but lacks members with specific telecoms experience.

Vodafone on track to deliver at the full-year

Third-quarter results were solid if unexciting. Revenues for the period grew 4.3% to €11.68bn, with group service revenue growth of 2.7%. Vodafone is seeing service revenue growth in both Europe and Africa, with growth in Germany of 1.1%, 4.4% in South Africa and 19.8% in Turkey, Egypt and Ghana. The company also said it is on track to deliver results for the full-year in line with the improved earnings guidance previously given to analysts in November, with adjusted EBITDAal (earnings before interest, tax, depreciation, amortisation and special losses) of between €15.2 - €15.4 billion and adjusted free cash flow of at least €5.3 billion.

Could we see a revival in Vodafone shares?

Shares in Vodafone have disappointed for years since reaching 253.75p back in May 2015 and are down 46%. However, they have had a good recent run after dropping to 106.4p last November, rising 29% to 137.7p. Citigroup analysts have reiterated their buy recommendation and set a price target of 170p.

Vodafone shares are worth holding for the 5.8% dividend yield. It may be tempting to take some profits, but it may also be worth holding onto some shares to see what changes Cevian Capital is able to achieve - and if any further bids may be in the offing for Vodafone Italy.

Go short and long with spread bets, CFDs and share dealing on 16,000+ shares with the UK’s No.1 platform.* Learn more about trading shares with us, or open an account to get started today.

* Best trading platform as awarded at the ADVFN International Financial Awards 2021

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Act on share opportunities today

Go long or short on thousands of international stocks with spread bets and CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Equities
  • Indices
  • Forex
  • Commodities
website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.

" >


Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.