Analysts cast doubt on Softbank-Vodafone rumours

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Japanese telecommunications giant rumoured to be eyeing up British operator following collapse of bid for T-Mobile US

Japanese telecommunications company Softbank is more likely to pursue a strategic alliance with Vodafone, rather than the rumoured full takeover of the British operator.

That was the opinion of MUFG telco and industrial analyst Rick Mattila, who said that the likely price of in excess of $100 billion, will be out of the Softbank’s reach.

The rumours emerged following the collapse of Softbank’s bid for control of America’s fourth largest operator, T-Mobile US, which it had planned to merge with Sprint, the US’ third largest carrier which it acquired last year. Softbank also owns global distributor Brightstar, recently appointing its founder Marcelo Claure to head up Sprint.

However, Mattila believes that the only way Softbank could fund the deal would be through its highly lucrative stake in Chinese e-commerce website, Alibaba, something which he believes is unlikely due to its forthcoming IPO.

“We are not convinced that there is either the desire or ability at this point to pursue an acquisition of this size by Softbank,” he said. “It would require a strategic re-alignment away from internet assets and that would seem to go against recent moves by the group.

“Overall, we believe that it is much more likely for the two groups to pursue an operational alliance of some sort, perhaps involving some sort of equity cross-holding.

“Some form of joint venture in Latin America or even Americas more broadly could make sense, although Vodafone is not currently active in the region. This would of course have a much more limited financial impact on both companies.”

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