Vodafone has just four days left to decide whether to trump its US rival Cingular with a knockout $40bn (£22bn) bid for AT&T Wireless.
Arun Sarin must win over the British group's board of directors and its institutional investors if he decides to reverse the strategy of concentrating on Vodafone's existing businesses that he unveiled when he took over as chief executive six months ago.
Speculation that Vodafone is preparing to mount an offer for AT&T Wireless has rattled the City, which believes a bid would destroy value for shareholders. Friday is the deadline for offers.
A move for the number three US mobile phone operator would force Vodafone to offload the bulk of its 45 per cent in Verizon Wireless, a rival company, to appease competition authorities. Analysts fear that Vodafone would have no option but to accept a low-ball offer from Verizon Communications, which has first option over the UK company's stake, worth an estimated $22.5bn. Furthermore, any sale would open up Vodafone to tax liabilities on the proceeds of up to $6bn, analysts have warned.
Cingular Wireless of the US has already indicated it is prepared to pay $30bn for AT&T Wireless. It could face competition from Japan's NTT DoCoMo, already a 16 per cent shareholder in the US bid target, which will decide this week whether to launch an offer.
However, The Independent has learnt that T-Mobile, the German group, has ruled itself out of the bid battle.
Mr Sarin has attempted to reassure Vodafone's investors by promising that the effect on shareholder value of any bid would be the key measure used to assess the situation. But this failed to prevent a 7 per cent slide in the value of the company over the past month.
While it owns only a minority stake in a US mobile operator, Vodafone cannot achieve its dream of becoming a truly global business. Plus, buying AT&T Wireless would unite two companies that use the same GSM technology, increasing Vodafone's appeal to the corporate market.Reuse content