Shares of Vodafone company (VOD.L) has jumped by 4% in early trade on Monday, 16 May, after the United Arab Emirates-based telecoms company e& (ETISALAT.AD) disclosed that it had purchased a 9.8% stake in the British mobile operator.
Vodafone has been struggling in its markets where regulation and competition have pushed prices lower, and its head Nick Read is under stress to boost returns.
E&, previously known as Emirates Telecommunications Group, stated it had made the investment to acquire “major exposure to a world leader in connectivity and digital services”, further adding it had no purpose of creating a bid for the whole company of Vodafone.
It said that Emirates Telecommunications Group firm PJSC, now called E&, has achieved a 9.8% stake in Vodafone for worth $4.4 billion on Saturday, 14 May.
The move came after a few days after e& stated it was looking to increase into new markets in Africa, Asia and Europe and in areas outside the telecoms like financial technology as it strives to drive growth.
Vodafone further said that it is looking forward to build a long-term relationship with United Arab Emirates-based company e&.
It said in a statement, “We persist in making good headway with our long-term strategic goals and will provide an update in our FY22 Results announcement on 17 May.”
E& said it had made the investment to gain “significant exposure to a world leader in connectivity and digital services”.
It further added that it had no purpose of making a proposal to buy Vodafone, saying it fully supports its existing business strategy and its board and management team.
“We see this investment as a promising opportunity for e& and its shareholders. It will let us improve and develop our international portfolio in line with our strategic endeavour,” said CEO Hatem Dowidar.