LONDON (ShareCast) - M&A rumours surrounding phone-network giant Vodafone lifted the mobile telecommunications sector to the top of the pile on Tuesday.

Vodafone, which has been the source of much speculation over recent weeks, saw its share price surge 5.6% to 197.05p in afternoon trade after the Financial Times said that part-owner Verizon Communications could be working on a break-up bid with US peer AT&T fir the British telecoms firm.

Citing sources close to the matter, FT Alphaville said that an offer, if made, would be pitched at around a 40% premium to current market prices, putting Vodafone’s enterprise value at a whopping $245bn. This would represent the biggest M&A deal in history, the paper said.

Speculation has ramped up over the last month – with shares now 18% higher than they were at the start of March – after it was reported that Verizon, which owns 45% of Vodafone, was looking to resolve its relationship with Vodafone, either by a buy-out or partial sale of its stake.

According to Ronnie Chopra, head of Strategy at Tradenext, investors should continue to hold shares of Vodafone to tap in to any potential upside from a possible offer.

Chopra said: “Vodafone has had a strong run from 160p at the beginning of the year, and has spiked higher […] due to the stake sale talks. Meanwhile, Vodafone is quietly getting on with building the business, having announced a number of new deals in March.

“Although much of the news is now in the share price, Tradenext continues to view the shares as a solid hold, and will continue to add on any dips. Any inkling of a bid from Verizon will almost certainly drive the shares above 200p.”

Elsewhere in the sector, AIM-listed mobile marketing solutions group Zamano was a high riser today, extending gains made after its full-year results were released in March.

Since the company reported on March 12th that it swung to a pre-tax profit of €3.57m in 2012 (compared with a loss of €0.33m the year before), the share price has jumped an impressive 98%, including today’s near-10% surge.

Inmarsat, Avanti Communications and Mobile Tornado Group were also making decent gains today.


Top performing sectors so far today
Mobile Telecommunications 4,605.45 +5.56%
Industrial Transportation 2,746.38 +3.18%
Gas, Water & Multiutilities 5,786.45 +1.57%
Tobacco 39,192.64 +1.50%
Travel & Leisure 6,168.36 +1.50%

Bottom performing sectors so far today
Industrial Metals & Mining 2,162.65 -3.18%
Personal Goods 21,174.78 -0.33%
Technology Hardware & Equipment 1,109.09 -0.30%

BC

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