Liberty Global has snapped up a 4.92 percent stake in Vodafone Group, estimated to be worth £1.2 billion ($1.46bn).

A takeover has been ruled out by Liberty Global, but the company claimed that the British telco is undervalued.

Liberty Global chief executive Mike Fries told the Financial Times that the investment was cheap and opportunistic.

"We believe, like many others, that Vodafone's current share price does not reflect the underlying long-term value of their operating businesses, or their announced consolidation and infrastructure opportunities," he said.

The company joins a host of foreign acquirers that have invested in Vodafone in recent months, with UAE-based e& (formerly Etisalat) and French tycoon Xavier Niel through his investment vehicle Atlas Investissement, taking shares in the company.

e& initially acquired a 9.8 percent stake in Vodafone last summer for $4.4 billion, but has since grown its stake to 13 percent, adding one percent each month since December.

Meanwhile, Niel, who is the owner of French telecom provider Iliad, scooped up a 2.5 percent stake in September of last year for an estimated $850 million. However, activist investor Cevian Capital sold off its entire stake in Vodafone in January, calling for faster changes.

The acquisition of a five percent stake means that Liberty Global is now Vodafone's third-largest shareholder, behind e& and US company BlackRock. Liberty Global also owns half of Virgin Media O2, a domestic rival to Vodafone in the UK.

Vodafone was involved in a number of deals last year, most notably selling off some of its Vantage Towers unit, creating a new joint venture with KKR and Global Infrastructure Partners (GIP) in the process.

What next for Vodafone?

Vodafone is currently on the hunt for a new chief executive, following Nick Read's decision to step down from the company at the end of this financial year, ultimately paying the price for Vodafone's dwindling share price.

But what does this mean for the proposed merger of Vodafone with CK Hutchison's Three UK?

"The move could be interpreted as a positive indicator for Vodafone’s planned merger with Three in the UK. The two companies confirmed talks last October, but have kept largely silent since," CCS Insight director, consumer, and connectivity Kester Mann told DCD.

"Liberty Global has been an active deal-maker in the European telecoms sector in recent times, including selling its operations in Germany, the Czech Republic, Hungary, and Romania to Vodafone for €18 billion ($19.3bn) in 2019."

Mann questions what Liberty Global will do next in Europe, suggesting potential M&As may be on the way. "One option could be to buy Vodafone out of its 50/50 Dutch joint venture, VodafoneZiggo. But CEO Mike Fries has also previously expressed interest in merging VodafoneZiggo with Belgian operator Telenet, a scenario that could become more attractive following recent positive comments from the European Union regarding pan-market consolidation."

Last year, Vodafone acquired Portuguese operator Nowo from MasMovil, while exiting the Hungarian market completely, selling its regional business unit for $1.8bn in August.

The operator is also close to selling a 70 percent stake in its Ghanaian business to Telecel Group after gaining approval from the National Communications Authority (NCA).

Vodafone previously sold off some of its operations in New Zealand, Malta, and Qatar, and has held discussions to sell its remaining 21 percent stake in Indian infrastructure firm Indus Towers.

Read more about the potential merger of Vodafone and Three UK here.