Hedge fund manager calls for Vodafone takeover by Verizon

Hedge fund manager John Hempton has called Vodafone's Australian operations “hysterical” and said the British mobile phone company would be much better off if it were taken over by its UNited States joint venture partner, Verizon Communications, according to The Australian Financial Review.

Speculation has grown that the two telecommunication giants are moving towards a takeover. Verizon Communications chief executive Lowell McAdam in January told the Wall Street Journal that buying Vodafone was “feasible”, and that there were “lots of different ways” a deal could be structured.

Vodafone owns 45 per cent of Verizon Wireless, while Verizon Communications owns the remaining 55 per cent.

Mr Hempton said Vodafone's performance in Australia cast doubt on trust in the company, and built a case for a full takeover of it by Verizon.

“Australia is just utterly hysterical, it is the worst performed market for [Vodafone],” he told the AFR.

“Vodafone stuffed its Australian network in 2010 by not anticipating the effect of smart phones three years after the introduction of the iPhone. The best thing about Vodafone is they have made Telstra look good. It's a pretty remarkable achievement.”

Mr Hempton is chief investment officer of Sydney's Bronte Capital, a firm whose second largest position is in Vodafone shares.

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Continues to interest me that the reference back to 2010 is used by the current management to justify the 2012 / 13 performance. Hempton's view of the global management ability of Vodafone is spot on given recent performance of the Australian operation and its European ops. And of course locally the current CEO Bill Morrow is more intent on a weekly appearance in the Australian newspaper building his profile (or perhaps trying to shore up his job) instead of actually trying to build the local operation. This weeks instalment was hilarious in that instead of finding out any detail of what he has planned for this year we discovered he was a sharpshooter in the US armed forces, he loved Hobart , he loves to sail, and he works "close" to six days a week!! No wonder the local business continues to decline, it would have been must more relevant to know where he thinks his growth is going to come from, are his numbers this year going to be driven by contract or prepaid customers, what is the timing of 4G, etc. But what we got was yet another "exclusive" puff piece in the Australian. Hysterical.