China Mobile Shares Drop Most in More Than a Year on Vodafone Stake Sale
China Mobile Shares Drop as Vodafone Sells Stake
Bernardo De Niz/Bloomberg
China Mobile, which is 74 percent held by state-owned China Mobile Communications, is the world’s biggest phone carrier by market value and number of subscribers.
China Mobile, which is 74 percent held by state-owned China Mobile Communications, is the world’s biggest phone carrier by market value and number of subscribers. Photographer: Bernardo De Niz/Bloomberg
China Mobile Ltd., the world’s biggest phone carrier by market value, fell the most in more than a year in Hong Kong trading after Vodafone Group Plc said it’s selling its 3.2 percent stake in the company.
China Mobile dropped 3.9 percent to HK$78.80 at 10:08 a.m. on the Hong Kong Stock Exchange, headed for the biggest decline since Aug. 17, 2009. Its American depository receipts traded in New York fell 4 percent to $50.25 after news of the sale yesterday.
Vodafone, which acquired its holding in China Mobile in two transactions between 2000 and 2002 for $3.25 billion, doubled the value of that investment to more than $6 billion and has said it doesn’t consider its minority holdings essential. The sale will have little impact on China Mobile as there wasn’t much cooperation between the two parties, said Flora Wu, a telecommunications analyst at BDA China Ltd. in Beijing.
“Vodafone has made money from the stock’s rise but other than that I didn’t see much substantial cooperation or tangible things,” Wu said by phone. “This sale won’t have a large impact on China Mobile’s business.”
China Mobile, which is 74 percent held by state-owned China Mobile Communications, is the world’s biggest phone carrier by market value and number of subscribers.
The 642.87 million China Mobile shares are being offered at a range of HK$79.20 to HK$80 apiece, according to the terms. About 70 percent of the proceeds will be returned to shareholders through a stock repurchase and the rest will be used to pay down debt, Newbury, England-based Vodafone said yesterday. Morgan Stanley, UBS AG and Goldman Sachs Group Inc. are managing the offer.
Rainie Lei, a Hong Kong-based spokeswoman for China Mobile, wasn’t immediately able to comment today. The British company is free to sell its shares, she said before Vodafone released its statement yesterday.
--Edmond Lococo. With Assistance from Matthew Campbell in London and Mark Lee in Hong Kong. Editors: Jonathan Annells, Young-Sam Cho.
To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at +86-10-6649-7507 or elococo@bloomberg.net.
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