Vodafone Group Plc (NASDAQ:VOD) (LON:VOD) said it will seriously consider any proposal from entities interested in acquiring its 45 percent stake in Verizon Wireless if the bid provides greater value to shareholders than its current situation, as reported by Reuters based on the statement of Gerard Kleisterlee, chairman of the board of the company on Tuesday.
Verizon plans to end its joint venture agreement with Vodafone
Earlier this year, there had been speculations that Verizon Communications Inc. (NYSE:VZ) plans to end its joint venture agreement with Vodafone Group Plc (NASDAQ:VOD) (LON:VOD) in order to fully control Verizon Wireless. It was also rumored that Verizon and AT&T Inc. (NYSE:T) are working together on a break-up bid for Vodafone’s stake in the joint venture.
However, Verizon Communications Inc. (NYSE:VZ) denied the speculations in April. The company said that it has no intention to acquire the stake of Vodafone Group Plc (NASDAQ:VOD) (LON:VOD) “whether alone or in conjunction with others” at the moment.
Vodafone stake in Verizon Wireless
Vodafone Group Plc (NASDAQ:VOD) (LON:VOD)’s stake in Verizon Wireless will probably be worth approximately $120 billion. The business is significant to the British telecommunications operator because its profitable, and its performance in primary markets in Europe weakened amid poor economic situation, strict regulation, and increasing competition.
During the annual meeting of Vodafone Group Plc (NASDAQ:VOD) (LON:VOD) in London, Kleisterlee said the company’s board is reviewing its stake in Verizon Wireless, and he doesn’t have anything new to announce regarding the joint venture.
When asked about the possibility of selling its stake, Kleisterlee said, “If we see proposals that generate more value for shareholders we will consider them. There is ongoing communication (that involves) the full board. Both executives and non-executives are involved in those negotiations with Verizon.”
Management of Vodafone and Verizon
The management of Vodafone Group Plc (NASDAQ:VOD) (LON:VOD) and Verizon Communications Inc. (NYSE:VZ) constantly communicate with each other regarding the daily operations and performance of the joint venture. According to Vodafone’s finance director, “The discussions we have are about the business primarily, and the business continues to do very, very well.”
Halford added, “Over the years both sides have had an interest in buying the other side out, and it ebbs and flows. The great thing is the business is a good one, most people would love to own that business, so it’s just a nice position to be in.”
Last May, Vittorio Colao, chief executive officer of Vodafone Group Plc (NASDAQ:VOD) (LON:VOD) said he would stake his reputation on selling the company’s stake in Verizon Wireless at the right time and right price. He also emphasized that he would not bow to any pressure to any offer.