Warburg Pincus is among potential suitors for Vodafone Group Plc’s Spanish business, people with knowledge of the matter said.
(Bloomberg) — Warburg Pincus is among potential suitors for Vodafone Group Plc’s Spanish business, people with knowledge of the matter said.
The private equity firm has been considering a bid for the Vodafone unit after it was put under review, the people said. Other investors including Carlyle Group Inc. are also in the early stages of evaluating the operations, according to the people.
The British carrier is working with an adviser as it evaluates options for the business, according the people, who asked not to be identified as the information is private. The Spanish unit, which could be valued at about $4 billion, has also attracted initial interest from buyout firm Apollo Global Management Inc., Bloomberg News reported earlier this year.
Vodafone has been trying to do a deal in Spain for more than a year. Its previous chief executive officer Nick Read said the market needed consolidation, but ended up on the sidelines as two of its rivals agreed to merge. Following years of eroding earnings, Read’s replacement Margherita Della Valle demoted the unit to Vodafone’s so-called “cluster” of smaller European businesses and placed it under strategic review.
Following its quarterly results on Monday she told reporters that Spain remains “a difficult market, of course, which requires structural action.” On a call with analysts, Della Valle said she was considering “a range of options on the inorganic front.”
No formal sale process is underway, and there’s no certainty the deliberations will lead to a transaction, the people said. Representatives for Carlyle, Vodafone and Warburg Pincus declined to comment.
The potential deal could pick up steam after a key ruling from antitrust regulators that may come on Sept. 4, the people said. That’s a provisional deadline for European authorities to decide whether to wave through a merger of the Spanish operations of Orange SA and Masmovil Ibercom SA — or instead demand remedies or block the transaction entirely.
Newbury, England-based Vodafone reported better than estimated first quarter sales growth Monday. Its service revenue grew 3.7% in the quarter from a year ago, beating analysts’ expectations. The telecommunications company also named Luka Mucic, a longtime executive at German enterprise software company SAP SE, to become its chief financial officer starting in September.
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