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Highlights
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Vodafone Group PLC confirms that the merger with Three UK does not require shareholder approval under new UK listing rules.
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The board believes the transaction is in the best interests of all security holders, facilitating quicker execution.
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The deal is projected to have a neutral impact on net debt ratios while being accretive to free cash flow and group earnings in the long term.
Vodafone Group PLC Merger with Three UK Advances Without Shareholder Approval
Vodafone Group PLC {LSE:VOD} has announced that the planned merger between its UK telecoms arm and Three UK will not necessitate shareholder approval, following the implementation of new UK listing rules. In a brief statement, the FTSE 100 company clarified that, classified as a significant transaction, the merger allows for a streamlined process where a vote from shareholders is no longer required.
According to Vodafone, the board has determined that the merger is in the best interests of all security holders. The revised listing rules permit significant transactions to be executed without shareholder votes, provided that companies adhere to enhanced disclosure requirements. This shift places the responsibility of decision-making on the company’s board of directors, enabling faster deal execution.
The statement further elaborated on the anticipated impacts of the merger. It is projected to have a "broadly neutral" effect on Vodafone's net debt to adjusted profit ratio on an EBITDAaL basis. The merger is also expected to be accretive to adjusted free cash flow starting from the fourth full year and to enhance group adjusted EBITDAaL, while increasing total assets and liabilities.
However, the transaction is not without risks. Completion is contingent upon obtaining necessary regulatory approvals and the consent of CK Hutchison shareholders. Additionally, Vodafone may face liabilities associated with customary warranties and indemnities, along with ongoing service obligations.
Concerns raised by the Competition and Markets Authority could pose further challenges, as the regulatory body is currently reviewing the merger with a final decision anticipated on 7 December. This situation underscores the complexities involved in the merger process and the necessity for compliance with regulatory standards.
