Vodafone is in talks with its subsidiaries in Sweden, the Netherlands and Portugal to buy out their minority holdings, in deals that will cost the mobile phone operator €2 billion.

Vodafone said the purchases, to be funded out of its cash resources and existing facilities, would not limit its ability to launch a share buyback. It has a current facility to buy back €3 billion shares almost 5 per cent of the total.

The announcement comes just days after Vodafone revealed that it was launching a tender offer to buy back up to €6 billion of its bonds.

Some analysts read this bond repurchase as a sign that Vodafone was shying away from a share buyback in the near term. Vodafone owns 74.7 per cent of Europolitan in Sweden, 77.6 per cent of Libertel of the Netherlands and 61.4 per cent of Portugal's Telecel.

The proposed purchase of the shares was offered at premiums to Friday's closing price of the three subsidiaries of 2.3 per cent 2.8 per cent and 4.2 per cent respectively.

The value of each of the operators rallied on the news, with their shares rising above the proposed buyout prices.

Traders said this was not unusual as investors hoped that Vodafone might sweeten its offer.

The moves, if successful, will eventually lead to the de-listing of the subsidiaries in their local markets.