New deal within 6 months possible if situation changes dramatically

Following speculation AT&T would make a bid for Vodafone somewhere north of $60 billion, the second-largest U.S. carrier has filed a statement saying it won't pursue the action any further. The official statement comes as a result of U.K. laws — in this case the U.K. Takeover Code — which require companies to release written statements as to their intentions of bid for a U.K. company.

Now our U.K. law prowess isn't of the highest degree, but it seems as though AT&T never actually had much of a serious intention to make a bid for Vodafone to begin with. And in light of the negative effects of the speculation on Vodafone's stock price — down about 3 percent over the weekend — AT&T was required to make a statement reflecting its true intentions.

Citing note 2 of Rule 2.8 of the UK Takeover Code, AT&T does have the right to make a bid for Vodafone in the next six months provided the circumstances fall into line with the notes on that rule. Loosely put, note 2 of Rule 2.8 gives AT&T the opportunity to make another bid for Vodafone if the deal structure changes dramatically (i.e. a reverse takeover), another company makes a serious offer to buy AT&T itself, or the U.K. authorities decide that there has been a dramatic change in circumstances surrounding an AT&T-Vodafone buyout.

That's all big and complicated with lots of legal jargon, but the end result looks to be AT&T putting a bid for Vodafone on the back burner for now. Unless something dramatically changes, we won't see the carrier making such a splash in Europe — or at least the U.K. — any time soon.

Source: AT&T; U.K. Takeover Panel

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