05 June 2015 by lberuti
Recently most of the volatility has been induced by Greece related pieces of news, and of course interest rates. But some parts of the market have been experiencing roller coaster rides of their own. TMT has been a fertile ground for M&A since the beginning of the year, and this looks set to continue. At the moment, much of the focus in that sector is going to Liberty and VOD ( Vodafone Group Plc ). The latter, whose risk premium is usually well behaved, have experienced wild swings since mid-May. Mr Malone first said then that Liberty and Vodafone would be a great fit. Today, VOD confirms that talks between the two companies are taking place, and that they are in the early stage of discussions regarding a possible exchange of selected assets. Importantly, VOD stated that they are not in discussion with Liberty Global concerning a combination of the two companies. That possibility was the main reason behind the aggressive widening of VOD’s 5 year risk premium. This announcement came as a relief to investors and they marked down VOD’s 5 year CDS accordingly, sending it 8bps tighter at 78bps.