Vodafone sells SFR stake

Mon 04 Apr 2011

VOD - Vodafone Group Latest Prices Name Price % Vodafone Group 182.20p +1.73%   FTSE 100 6,019 +0.15% FTSE 350 3,190 +0.16% FTSE All-Share 3,122 +0.15% techMARK 1,897 +0.21% Mobile Telecommunications 4,158 +1.67% LONDON (SHARECAST) - Vodafone’s sale of what it considers non-core minority stakes continues with the sale of its 44% holding in French mobile phone group SFR to French media group Vivendi. Vivendi is paying €7.75bn (£6.8bn) in cash for Vodafone’s stake. The UK-based mobile phone network operator will also receive a final dividend from SFR (Société Française du Radiotéléphone) of €200m (£176m) on completion of the transaction. In addition, Vodafone and SFR will enter into a partner market agreement which will maintain their commercial co-operation. In the six months to 30 September SFR contributed £284m to Vodafone’s adjusted operating profit. It is the second largest mobile operator in France. Vodafone said £4bn (€4.5bn) of the net proceeds from the sale will be returned to shareholders in the form of share buy-backs, with the remainder going towards reducing debt. At 30 September 2010 the SFR investment had a carrying value of €4.9bn (£4.3bn) in Vodafone's accounts. The transaction consideration represents an EV/EBITDA (enterprise value/earnings before interest, tax, depreciation and amortisation) multiple of 6.7x for the current financial year and is expected to be neutral to free cash flow per share following completion of the share buy-back. “Our board remains committed to realising maximum value from our non-controlled assets,” said Vittorio Colao, chief executive officer of Vodafone. “The sale of our stake in SFR, at an attractive multiple, represents a significant further step in the execution of this strategy. In addition, we have secured a valuable partnership agreement in France which will allow us to continue to deliver compelling cross-border services to both consumer and enterprise customers across the major markets of western Europe,” he added.