If there were any doubts that AT&T’s appetite for a Vodafone takeover bid was waning, the American telecommunications giant’s latest potential stock buyback may erase them.
AT&T said on Monday that its board had authorized the repurchase of up to 300 million shares, or about 6 percent of its total shares outstanding. At Monday morning’s stock price, that’s worth a little under $1.1 billion.
While the company has bought back stock in the past â€" 775 million shares since 2012 â€" the latest round reinforces the idea that it has turned its back on a takeover bid for Vodafone, at least anytime soon.
Two months ago, AT&T disclosed that it was not in talks to buy its European counterpart, a transaction that could cost more than $100 billion. Under British takeover rules, that meant that the American telecom could not make another run at a deal for six months unless invited to do so by Vodafone.
But Vodafone has other matters on its mind. Two weeks ago, the carrier announced plans to buy Ono, a Spanish cable operator, for about $10 billion.
The deal will add assets to Vodafone that analysts said wouldn’t be appealing to AT&T.
AT&T has capacity to do big deals, with $3.4 billion in cash and short-term investments as of year end and an A3 credit rating from Moody’s Investors Service. But the company has limits, since it plans to keep its debt level at about 1.8 times adjusted earnings before interest, taxes, depreciation and amortization.
And if Vodafone intends to keep spending the proceeds it received from selling its 45 percent stake in Verizon Wireless back to Verizon â€" roughly $60 billion in cash and $60 billion in its former partner’s stock â€" AT&T is be less likely to make a big play.
Just days before the Ono deal was formally announced, AT&T was already hinting publicly that it planned to look elsewhere. “We’re seeing the window of opportunity in owning assets is closing,†John Stephens, the company’s chief financial officer, said at an industry conference.
A spokesman for AT&T declined to comment on Monday.
