Verizon says will not pay a premium for Vodafone stake

Reuters – In a note to clients, analyst Philip Cusick said Verizon boss Lowell McAdam had said he did not believe a premium would be required to buy Vodafone‘s 45 percent stake in the highly successful Verizon Wireless business, because Verizon already had control through its 55 percent holding.

Lowell McAdam also indicated to the JP Morgan team that the two owners could face a “lean” year in terms of the dividend they receive from the Verizon Wireless asset, a move which could increase tensions between them. more> http://tinyurl.com/bwkzpd8

Verizon Deal With Vodafone Could Be Worth More Than $130B, Would Create Largest U.S. Carrier

By Agustino Fontevecchia – a deal could come at a price of between $130 and $137 billion, and would create the largest U.S. phone operator, leaving AT&T T +0.13% behind.  To go ahead with the transaction, not only will Verizon’s chief executive Lowell McAdam have to convince his British counterparts at Vodafone to sell for less than they want to, but he will also have to raise a lot of cash, issuing possibly $120 billion in debt and stock.

Management on both side have begun the valuation fight. more> http://tinyurl.com/cudewwq

Related>

• Verizon seen having clear path to funds for Vodafone deal, Natalie Harrison and Danielle Robinson, Reuters
• Vodafone Shareholders Want Verizon Talks to Start at $120 Billion: Report, Michelle Maisto, eWeek

Verizon gorilla eyes Vodafone gorilla – who will win?

By Kamal Ahmed – Verizon’s biggest problem is that Vodafone is in no hurry to sell. Even though many judge the present relationship “sub-optimal”, and Verizon is clearly agitating for a change, Verizon Wireless is posting growth rates at emerging market levels in the most important telecommunications sector in the world – America.

“I think the merger or full takeover scenario, although not at the forefront of discussions right now, could actually end up being the more palatable deal,” Ralph Brook-Fox, UK equities fund manager at Ignis Asset Management, a top 40 institutional shareholder in Vodafone, told Reuters this weekend. more> http://tinyurl.com/c7u6dte

Related>

• Analysis: Tax strategy may be key to Verizon Wireless deal, Kevin Drawbaugh and Nanette Byrnes, Reuters

Verizon eyes $100 billion bid for Vodafone’s Wireless stake

By Soyoung Kim and Kate Holton – The two sources said Verizon was considering a 50:50 cash and stock bid for the 45 percent stake it does not already own, an asset it has long coveted but that Vodafone will take some persuading to give up. It has not put a proposal to Vodafone yet but has hired both banking and legal advisers for a possible offer.

“The tax problem has always been the issue. If a way can be found around that, then it is highly likely that a deal will be done,” the top-15 investor said. more> http://tinyurl.com/bc9owmy

Verizon beats estimates and raises Vodafone pressure

By Sinead Carew – Verizon Communications Inc posted a higher-than-expected quarterly profit on the performance of its wireless business, which reined in costs without slowing growth.

Verizon also ramped up the pressure on Vodafone Group Plc, which owns 45 percent of the Verizon Wireless unit.

“It just feels like they’re tightening the circle around their customers,” Evercore analyst Jonathan Schildkraut said, referring to Verizon’s ability to retain customers and add more devices through its data share plans. more> http://tinyurl.com/cw4t6gc

Related>

• Verizon rakes in wireless service fees in first quarter; shares hit 12-year high, Associated Press/Washington Post
• Verizon’s new phone upgrade policy draws scrutiny, Roger Cheng, CNET News
• iPhone Activations Rise 25% at Verizon, Account for 55% of New Smartphones, Eric Slivka, Mac Rumors
• Wireless Fees Drive Verizon’s Earnings Beat, CNBC