Trick, or treat

In response to the France Telecom/Amena deal over the summer, a friend in the industry recently remarked, "If you've got to make money by Friday, by all means buy a GSM network, but beyond that, forget it." I have long argued that the industry has too much cash and too little imagination, or rather, too little conviction in its attempts at transformation. When in doubt, buy more network. Friday gave us one good example (does anyone else remember that Vodafone just sold out of its previous Indian investment, RPG Cellular, last financial year? - A mega-value reader points me to this post, which gives a bit of history and also some interesting scenarios for Vodafone in Asia), and today we have a real cracker. A formerly very focused player puts its credit rating at risk to make yet another acquisition way out of footprint, and at nearly 9x forecast EBITDA and a 20% premium to the 52-week high. Cynics like me would say bring back Juan Villalonga (well, maybe not the man, but perhaps at least elements of his vision), and build a diversification strategy on core strengths in Latin America.