Verizon Preps for $100B Wireless Bid

by Christopher Freeburn | April 25, 2013 9:24 am

Verizon Wireless 1 300x199 Verizon Preps for $100B Wireless Bid[1]Sources tell Reuters that Verizon (NYSE:VZ[2]) is readying a bid to acquire[3] Vodafone‘s (NASDAQ:VOD[4]) stake in their U.S. wireless joint venture, Verizon Wireless.

The bid could total more than $100 billion, funded with both cash and Verizon shares. Verizon has not approached Vodafone over the deal yet, but is laying the groundwork to launch a bid. Both companies have previously discussed potential changes to the joint venture. Concerns over Vodafone’s potential tax bill from any buyout have emerged as a significant issue.

Verizon owns 55% of the nation’s largest wireless carrier and has long wanted to gain sole ownership of the business.

An unnamed Vodafone investor told Reuters that $100 billion was too low a bid to win a deal and that Vodafone was looking for a buyout price of between $125 billion and $130 billion.

Verizon has reportedly begin hiring financial and legal experts to advise it on the potential bid. Keeping the tax bill for the deal to under $5 billion was said to be a driving force in the way any acquisition would ultimately be structured.

Earlier this month, rumors circulated that Verizon would partner with AT&T (NYSE:T[5]) on a complex bid to acquire both Vodafone’s interest in Verizon Wireless and Vodafone itself[6]. Under the arrangement, Verizon would get full ownership of Verizon Wireless, while AT&T would purchase Vodafone’s overseas operations.

Shares of Verizon rose more than 1% in Thursday morning pre-market trading, while Vodafone climbed more than 2%.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2011/05/Verizon-Wireless-1.jpg
  2. VZ: http://studio-5.financialcontent.com/investplace/quote?Symbol=VZ
  3. readying a bid to acquire: http://www.reuters.com/article/2013/04/25/us-verizonwireless-verizon-idUSBRE93O02C20130425
  4. VOD: http://studio-5.financialcontent.com/investplace/quote?Symbol=VOD
  5. T: http://studio-5.financialcontent.com/investplace/quote?Symbol=T
  6. acquire both Vodafone’s interest in Verizon Wireless and Vodafone itself: http://investorplace.com/2013/04/verizon-att-consider-biggest-takeover-in-history/

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