Vodafone is increasingly being sized up as a potential merger and acquisition (M&A) target going forward. That at least is how markets interpreted its disclosure of an 18bn pound tax credit related to losses in Germany and Luxembourg. Nevertheless, most observers do not seem to believe that an eventual bid will occur before the Verizon deal closes next year. Or do they? The small share price bounce seen yesterday might also be a reaction to the telecommunications outfit's decision to carry out extra investment - £7bn planned over two years, up from £6bn over three. That comes as the company held guidance for a full-year operating profit of £5bn (ex-Verizon) and suggested that a turn in Europe is in sight. Such investment will improve its competitive position the 3G and 4G networks space as conditions brighten. The problem is a short-term earnings impact, with the enhanced plan only becoming ebitda-neutral in 2016-17. Judging by Tuesday's small share price bounce, the market grasps this equation. Either that, or it is expecting M&A developments before then, the Financial Times' Lex column writes. There are several reasons to suspect the negativity over BskyB may be over the top, at least in the near term. After all, it still has Champion League rights for the rest of this season and the whole of next. As well, there remains plenty of room to grow in broadband and on-demand services. Furthermore, the Champions League accounts for less than 3% of total viewing, analysts noted yesterday. Finally, once its own £400m, three-year Champions League deal expires, BSkyB will enjoy annual savings that it could choose to spend on other sports, increasing its original drama commissioning clout or further hardware upgrades.BSkyB's fundamentals remain strong then, in the near term. But BT's willingness to pay nearly £900m for Champions League rights, almost twice the previous total, nevertheless signals a new reality in pay television that means investors should have a cautious eye on the medium term. BSkyB absolutely could not afford to lose the battle to remain the senior Premier League broadcaster for its very foundations as a subscription business. The company pays a dividend with a yield of 3.8%, forecast to slip to 3.4% next year as competition bites. The shares are on an earnings multiple of 13.2, expected to increase to 15.9 next year. Despite the unprecedented challenge BSkyB now faces, The Daily Telegraph's Questor team currently rates it a hold. The proposed takeover of Andor Technology, a Belfast-based maker of high-tech optical devices, by Oxford Instruments would be a good one, as yesterday's share price reaction showed. Andor shares jumped 90p to 490p, while those of Oxford Instruments rose sharply as well, up 198p, or 16%, to £14.25, despite the fact that it will be paying out about a fifth of its market capitalisation, or £160m. Perhaps critically, both companies serve broadly the same range of research customers, so the synergies are clear. Oxford Instruments' halfway figures showed a dip in pre-tax profits and revenues as it was hit by curtailed government spending in the US and some low-margin industrial contracts that came to an end. Nevertheless, the dividend is up 10.2% to 3.36p, even though Oxford is not an income stock. Andor investors could consider taking profits, although The Times' Tempus column says that it would tend to stay in to see what the situation brings.Please note: Digital Look provides a round-up of news, tips and information that is impacting share prices and the market. Digital Look cannot take any responsibility for information provided by third parties. This is for your general information only as not intended to be relied upon by users in making an investment decision or any other decision. Please obtain a copy of the relevant publication and carry out your own research before considering acting on any of this information.AB