Verizon To Bid $100B For Vodafone’s Stake In Verizon Wireless

Verizon earnings stockSee page for author [Public domain], via Wikimedia Commons

Verizon Communications Inc. (NYSE:VZ) may be preparing a bid to gain control of Verizon Wireless away from Vodafone Group Plc (NASDAQ:VOD) (LON:VOD), its partner. That’s according to two sources cited by Reuters. Earlier this month, Verizon Communications denied rumors that Vodafone was preparing to sell its 45 percent stake in their joint venture to Verizon Communications.

Verizon To Bid $100B For Vodafone’s Stake In Verizon Wireless

Shares of Vodafone Group Plc (NASDAQ:VOD) (LON:VOD) fell after Verizon’s denial that it wanted to buy Vodafone’s stake, and this morning they’re on the rise at the NASDAQ again in pre-market trades after the rumor has resurfaced. Vodafone shares rose as much as 3 percent Thursday morning before opening bell.

Today Reuters reports that Verizon Communications Inc. (NYSE:VZ) may bid $100 billion in cash for Vodafone’s 45 percent stake in Verizon Wireless. The media company reports that Verizon has not yet put an official proposal to Vodafone, but it has hired the advisors needed for such a bid.

Reuters’ sources said Verizon Communications Inc. (NYSE:VZ) is ready to put forth a more aggressive push to acquire Vodafone Group Plc (NASDAQ:VOD) (LON:VOD)’s stake in their joint venture. They also said Verizon is hoping to start friendly discussions with Vodafone soon but that the company is prepared to publicize its bid if Vodafone does not come to the negotiating table.

Vodafone’s CEO has said he is keeping an open mind about selling his company’s stake in Verizon Wireless, even though that stake now makes up about 75 percent of Vodafone’s value as its business in Europe has declined. The biggest problem has been said to be a possible $20 billion tax bill Vodafone would face if it sold its stake in Verizon Wireless. That would mean Verizon Communications Inc. (NYSE:VZ) would need to make the price pretty high to make it worthwhile for Vodafone to sell.

However, Reuters’ sources said the deal would be structured in a way that would make Vodafone Group Plc (NASDAQ:VOD) (LON:VOD)’s tax bill no more than $5 billion.

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About the Author

Michelle Jones
Michelle Jones was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Michelle has been with ValueWalk since 2012 and is now our editor-in-chief. Email her at Mjones@valuewalk.com.