Vodafone Idea shares dropped off a cliff on Monday after the company quashed rumours suggesting acquisition talks with American giants Verizon, Amazon, and Starlink.
What Happened? The buzz, which originated from an online news portal, claimed that these U.S. behemoths were vying to acquire the financially beleaguered Indian telecom operator. This speculation had driven Vodafone Idea’s stock up by an impressive 20% in the past fortnight.
However, in a statement to the BSE, Vodafone Idea clarified, "We are not engaged in any discussions with the mentioned parties."
Notably, between August 16 and September 15, 2023, the company’s stock witnessed a 50% surge, reaching ₹11.73. This uptick followed reports suggesting the telco was on the brink of securing long-awaited equity funding, with term sheets from multiple potential investors in hand.
The market is rife with chatter, as experts anticipate one among Verizon, Amazon, or Elon Musk’s Starlink to potentially acquire a controlling stake in the Indian telecom player.
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Vodafone Idea, a joint venture between the UK’s Vodafone Group and India’s Aditya Birla Group, has both entities collectively holding a 50.1% stake. Interestingly, the Indian government, after converting the telco’s accrued AGR interest into equity in February 2023, emerged as its largest shareholder with a 33.1% stake. If the government decides to offload its stake to any of the aforementioned U.S. companies, market pundits predict the share price could soar to ₹25.
Price Action: Vodafone Idea shares were trading 3.85% lower at ₹11.25, shortly after the company put out a regulatory filing denying any acquisition talks.
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