Proactive Investors - Vodafone Group’s (LON:VOD) largest shareholder, the Abu Dhabi-based Emirates Telecommunications Group Company (aka e&), has been in discussions with the debt-riddled British telecoms company regarding the composition of its board of directors, Bloomberg today reported.
It is unclear what direction e& hopes to pursue, but analysts have called it a departure from the investor’s typically hands-off approach to governance matters.
Erhan Gurses, Bloomberg’s telecoms analyst, said the Emirati company’s push “is a change from its original position, suggesting it may become a proactive force to ensure execution aligns with its long-term strategy”.
“This is a substantial change in position for e&... which has previously stated full alignment with Vodafone's strategy,” stated Robert Grindle, head of European TMT research at Deutsche Bank.
Grindle suggested that e&'s interest may be in Vodafone's African unit Vodacom, which Vodafone is hoping “to extract maximum value from”.
Vodafone’s board ousted chief executive Nick Read last December following prolonged frustration with his ability to turn the group’s tumbling market valuation around.
But Vodafone has yet to secure a suitable replacement.
Meanwhile, e& has steadily increased its stake in Vodafone in the past five months, from 11% in December 2022 to 14.6% as of today.
e&, alongside Liberty Global (NASDAQ:NASDAQ:LBTYA) and French billionaire Xavier Niel, now control more than 20% of the British telecoms group.
Grindle noted that e& is only permitted to increase its stake in the telecoms group to a maximum of 15% under regulatory standards.
Vodafone shares jumped 1.6% to 91.12p following the news, but remain close to 30% lower on a year-on-year basis.