Vodafone is approaching the appointment of a new boss after the interim director received support from key institutional investors for her stewardship of the telecom giant.
Sky News has learned that the FTSE-100 group board is leaning towards appointing Margherita Della Valle, who served as chief financial officer between 2018 and the end of last year, as its permanent CEO.
Telecom industry sources said on Thursday Vodafone could make an announcement about Nick Read’s successor in the coming days.
Ms. Della Valle has worked for Vodafone since 1994 in various incarnations, both in Italy and the UK.
She took over as interim CEO on Jan. 1, having been elevated to the position the previous day when Mr. Read stepped down.
City insiders said Ms. Della Valle accelerated a number of key strategic initiatives during her four months at the helm and impressed key shareholders with her approach to the job.
A source warned on Thursday that Vodafone’s board, chaired by former Heineken chief Jean-Francois van Boxmeer, had yet to make a formal decision on the appointment of the next CEO.
Some high-quality external candidates were also said to have been in talks with Vodafone in recent months, and it remained possible that an announcement was still a few weeks away.
Increasing pressure on the company
Institutional investors have been anticipating an announcement regarding the CEO’s succession ahead of the company’s full-year earnings report on May 16.
The appointment of a new CEO comes under increasing pressure on the company, which has been criticized under Mr Read for being too slow to make strategic decisions in a rapidly changing telecom landscape.
Vodafone’s largest shareholders include UAE-based telecom group e&, which this week announced it had increased its stake to 14.6%.
E& has expressed no interest in making an offer for Vodafone, although analysts have speculated that such a move is not unlikely in the medium term.
Vodafone shares have fallen over the past year
Shares in Vodafone have fallen by a quarter over the past year and the company now has a market value of just £25.5bn – a far cry from its peak valuation of well over £100bn.
Liberty Global, the US-based telecom company, has also acquired a stake in the UK mobile phone network operator – a move described in February by the buyer’s CEO Mike Fries as “an opportunistic and financial investment”.
Vodafone has also invested in a vehicle led by French telecommunications mogul Xavier Niel, another sign that industry executives around the world believe the company is underperforming or undervalued.
Desire for commotion
It is unlikely that Vodafone’s board will appoint Ms. Della Valle as the new CEO without the guarantee of backing from leading investors.
A longtime company insider, she was initially considered an outside contender to replace Mr. Read due to some shareholders’ desire to see a shake-up under an outside appointee.
Vodafone remains in talks with the owner of Three UK over a merger of their UK operations, while it was also reported this week that it is in talks over several deals involving parts of its European operations.
Business in Germany faltered, while the company also failed to capitalize on M&A opportunities in other markets.
Vodafone declined to comment.