Vodafone (VOD) may be increasing the volume of overtures to a key acquisition target. The mobile network business is believed to be mulling a tie-up with US media and communications group Liberty Global, the owner of the UK’s Virgin Media. Vodafone’s interest is likely to involve Liberty’s UK and European fibre broadband infrastructure and content rights.

Vodafone told analysts in May that no new talks had taken place with Liberty, with chief finance officer Nick Read ‘pointedly brought up strategic alternatives to Liberty,’ reveal the telecoms team at investment bank Jefferies. ‘It will be interesting to see whether Fox retains Sky UK phone and broadband should the takeover complete,’ Read said.

Pay-TV company Sky (SKY) is in the middle of an £18.5bn buyout by Rupert Murdoch’s 21st Century Fox.

Vodafone’s Read also mentioned possible anchor tenant options with BT’s (BT.A) Openreach that would quicken the pace of its own fibre UK infrastructure roll-out. Openreach runs the UK’s broadband fibre backbone network.

Jefferies believes this name-dropping could be a subterfuge. ‘Our suspicion is that market debate on Fox-Sky and Openreach is being used to transmit signals of confidence to Liberty.’

Vodafone and Liberty have held talks before. The UK company walked away from asset swap discussions in October 2015. Those conversations involved the pair’s respective operations in the UK, Germany and the Netherlands. Speculation has refused to die down. (SF)

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