Incorporating Spanish exit-expect a dividend cut VOD''s sale of its Spain unit underscores our view from our recent research ''Call waiting'' that there is SOTP upside from a break-up but it is hard to crystalise. Exiting Spain is the right strategic move but a 4-5x exit EBITDAaL multiple is low and likely to trigger a dividend cut in our view. Perhaps VOD''s investment case becomes more enticing once the dividend and FCF consensus have been rebased, but for now we prefer to be exposed to higher quality earnings stories in Europe. What we learned that we didn''t know Monday? 1) While the price had been trailed in the press we did not expect a full exit, ie VOD crystalised more of VOD ES than we had expected. 2) The impact of the TSA recharges reimbursements falling away is in our view negative and means that the deal is more FCF dilutive than perhaps had been anticipated by consensus. 3) There is still some risk around financing till the equity raise is completed, in our view. It is unclear what happens to the deal if the equity raise is insufficient. 4) VOD was very open on the need for reviewing capital allocation post close (targeted in Q1 24). This increases our confidence that the dividend will be roughly halved in May-24 with the FY24 results. Read-x to the wider Spain telco market is negative on balance VOD ES under Zegona ownership would be a more levered player - and arguably therefore more capital constrained. While there was some encouraging comments about seeking to stablise revenues and reduce promotions we also believe the appointment of a disruptive new mgmt. team, greater focus on growing the no-frills segment and expanding in the wholesale risk reads means that the ownership on balance bodes negatively for the state of competition in the market. Changes to estimates Deconsolidating VOD ES leads to a 7-8% cut to FY25-27 FCF and dividend cover is likely to come down. The EUR5bn EV is higher than our SOTP of EUR3.5bn so we raise our...