However, the latest twist in the M1 acquisition saga is not shocking to analysts.
"It is not surprising that Vodafone did not go for M1," Gartner Asia Pacific director of Telecoms & E-Business Bertrand Bidaud said.
"(Vodafone) needs to integrate its previous purchases before considering future acquisitions...it is not going for growth at any cost," Bidaud said.
Specifically, past acquisitions include stakes in German media giant Mannesmann AG, Swisscom Mobile in Switzerland and Japan Telecom as well as an increased shareholding in Spain's Airtel.
In fact, Vodafone CEO Chris Gent has halted further acquisitions in the current year to grow its profit margins and focus on the rollout of General Packet Radio Service (GPRS) phones for Christmas, Reuters reported.
Gent was speaking to reporters during a conference call earlier yesterday from London to announce the company's financial year results. He also confirmed that the UK-based telco "is not bidding" for M1.
Although he does not expect further acquisitions in the current year, Gent did not rule out expansion in Japan and China, Reuters reported.
As Keppel Corp executive chairman Lim Chee Onn had revealed last Friday, the deadline for submitting firm bids (for M1) was May 28.
This would narrow potential buyers to Regional Wireless Co--a joint venture between Telstra (60 percent) and Pacific Century CyberWorks (40 percent)--and Malaysia's Maxis Communications Bhd, according to various press reports.
For CyberWorks, its chairman Richard Li expressed interest in M1 last Friday although he added that the bidding decision would rest on Telstra. Regional Wireless was also said to have secured financing from Barclays, Citigroup and UBS AG for the proposed buy.
As for Maxis, citing unidentified sources, The Business Times today said that the Malaysian telco was seeking a stake in M1 although it had earlier this month denied its interest in the Singapore mobile operator.
The paper also said, citing an unidentified telecoms investor, that JP Morgan Chase Jardine Fleming and Merrill Lynch (which handle the M1 sale) have set an unofficial floor price of US$1.2 billion.
M1's tender was first announced on April 4, when its shareholders said they were looking to dispose of their stakes in the telco. The shareholders are Keppel T&T (35 percent), Singapore Press Holdings (35 percent) and Great Eastern (30 percent), a joint venture between CyberWorks and Cable and Wireless Plc.
M1 had a profit before tax of S$79 million on sales of S$570 million last year. Its average revenue per user was about S$70 on a subscriber base of 800,000 as at last December.
Bad timing mars bid?
Why isn't there overwhelming response for M1 when the deadline ran out on Monday?
Hong Kong's Hutchison Whampoa denied any plans to acquire M1 while Singapore's largest telco, Singapore Telecommunications Ltd, scrapped its planned acquisition last week.
"Too many companies have bad debts (at present), thus they can't afford international expansion," said Gartner's Bidaud. For instance, he pointed out that companies such as Cable & Wireless and British Telecommunications Plc are selling off their investments in Asia to clear debts.
In addition, companies are not ready to enter a price war, he noted, although he believes that the unofficial US$1.2 billion floor price did not hinder potential bidders as it was "reasonable".
Vodafone yesterday reported its first-ever fiscal year loss of 9.76 billion pounds (US$13.8 billion) due to acquisition-related costs. This compares with a profit of 487 million pounds in the previous year ended March 2000.