Shares in Swisscom fell today on concerns for future growth after the government said last week it would block foreign acquisitions, crushing its plans to offset falling revenues at home by overseas takeovers.
Shares in the cash-rich telecoms operator, which is majority owned by the Swiss government, were down 2.1 per cent at 408.25 francs as investors voiced concerns that the group would now be confined to its home market, where it faces limited growth opportunities and tough competition.
Deutsche Bank rushed to downgrade its rating on the stock to "sell" from "hold" and cut its price target to 355 francs per share from 400 francs.
The Swiss finance ministry said on Friday it would block any major attempts by Swisscom to expand abroad as long as it remained a majority shareholder.
Swisscom declined to comment today, and would not be drawn on speculation that this could cost its chief executive his job.
"Political influence, as well as the uncertainty whether CEO Jens Alder will remain in his position, should weigh on the group's share price," said Zuercher Kantonalbank analyst Serge Rotzer.
State-controlled Swisscom said two weeks ago it was in talks with Eircom about a takeover that sources familiar with the situation have said valued Eircom at more than €2.6 billion. It is also looking at a possible $12 billion acquisition of Denmark's TDC.
One source familiar with the company told Reuters both sets of negotiations had been frozen pending discussions over the weekend. The source added that the government had been kept informed of Swisscom's acquisition plans throughout.
Swisscom, which has failed in attempts to buy neighbour Telekom Austria and Czech Cesky Telecom, has said the board would meet to discuss the government's decision.