Australia’s TPG soars 20% on prospect of Vodafone tie-up
Rival Telstra also benefited from news that Vodafone’s Australian venture and TPG had held talks
Sydney — Australia’s TPG Telecom is looking into a merger deal with rival Vodafone, a move that could provide a faster and cheaper entry into the mobile network market while tempering competition in the cut-throat industry. The news sent TPG’s shares soaring 20% to a near-two-year high, their best daily gain since 2009. TPG and Vodafone’s local venture said in separate statements they had engaged in "exploratory" talks, while offering no details including whether a deal would represent a takeover by either party. "There is no certainty that any transaction will eventuate or what the terms of a transaction would be," TPG said, while Vodafone — the parent of JSE-listed Vodacom — called the talks "nonbinding". But the news was enough for investors to envisage a significant reshaping of TPG’s current strategy of entering the Australian mobile market by spending billions of dollars to roll out its own network infrastructure.
"The reason the market reacted positively is they see tha...