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Vodafone weighs AT&T Wireless bid

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LONDON, England (Reuters) -- Mobile phone giant Vodafone Group stoked fresh speculation on Monday it was poised to launch a knockout $30 billion-plus bid for U.S. rival AT&T Wireless by reiterating it was considering a takeover.

With five days to go before Friday's deadline for bids, the world's largest wireless operator by revenue said it "continues to monitor developments in the U.S." and was exploring whether a deal with AT&T Wireless was in the interests of shareholders.

AT&T Wireless, the third-largest U.S. wireless operator, put itself up for sale last month after receiving an offer from a U.S. rival following a series of lackluster results.

The U.S. group, which is 16-percent owned by Japan's NTT DoCoMo, has already received an informal, all-cash bid of about $30 billion or $11-per-share from Cingular, the number two wireless group controlled by SBC Communications and BellSouth, sources close to talks have said.

A counter-bid by financially powerful Vodafone could mark a return to empire building under new Chief Executive Arun Sarin.

Vodafone won a reputation for aggression after a $66.5 billion bid for U.S. mobile group AirTouch in 1999 and a 180 billion euro ($230 billion) takeover of Germany's Mannesmann in 2000.

But analysts and shareholders remain skeptical of the merits of a trumping bid for struggling AT&T Wireless, partly because Vodafone would have to sell a lucrative 45-percent stake in Verizon Wireless, the largest U.S. mobile phone company.

Vodafone's stock, which has fallen more than eight percent since AT&T Wireless put itself up for sale on January 22, pared some of its recent losses on Monday. But some investors put this down to market hopes that Vodafone was unlikely to bid.

"If Vodafone were really serious about a bid, they would have to be warming up major shareholders by now... But I haven't heard of them doing the rounds," said John Hayes, a fund manager at F&C Management, which is overweight in Vodafone shares.

"I can't see them being able to put together a sufficiently good investment case -- especially as in their brief statement, they refer to value to shareholders," he added.

Copyright 2004 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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