Verizon woos Vodafone to buy $40bn Wireless stake

[jones]

Verizon woos Vodafone to buy $40bn Wireless stake
By Tony Glover - Technology Editor
12 March 2006


City observers have been waiting for a “put option” clause relating to Vodafone’s shareholding in Verizon Wireless to take effect this summer. Every year, the clause gives Vodafone an opportunity to sell its shares in stages. But according to a source within Verizon there is no need to wait until the summer if an open market price can be agreed.

According to a City analyst: “The put option is a complex part of the agreement between Verizon and Vodafone that is now increasingly becoming irrelevant as Verizon tries to make a market offer for Vodafone’s 45% in Verizon Wireless.”

This summer is also scheduled to see Sir John Bond take over from Vodafone chairman Lord MacLaurin of Knebworth. The City expects Bond’s arrival as chairman will mark a strategy shift for the company, with some analysts predicting the switchover may occur earlier than anticipated.

http://thebusinessonline.com/Stories...B232D29&page=0

[ShoresGuy]

That's an interesting question a lot of people are waiting to get an answer to....however, Vodafone is probably also biding their time so they can consider their alternatives. At the same time, I don't think Vodafone will be content to settle for $40bn. They're also bound to make a lot of money off their Japan sale. Vodafone will probably get a handsome price for their network in Japan. It's valued at $12bn:

http://uk.biz.yahoo.com/03032006/323...apan-unit.html

No doubt they could make a move to increase their stake in Verizon this way.

[EdwardP]

Reuters had an article on this today.

Vodafone has made no secret of their desire to use their own brand. When they acquired AirTouch, I think that was the point where they had their chance to use that to launch their brand in the U.S.

Since Deutsche Telekom has already announced that T-Mobile USA is not for sale, the only way Vodafone could launch their own brand in the U.S., if they sell their interest in Verizon Wireless to Verizon, would be to acquire a smaller GSM carrier or carriers and build up from there.

[jones]

agreed VZ is desperate on Buying out Vodafone

Verizon is under pressure to consolidate control of Verizon Wireless in the wake of AT&T's (T) planned acquisition of BellSouth (BLS), which will give AT&T complete control of top U.S. wireless company Cingular Wireless.

[ShoresGuy]

Just the fact that they're desperate doesn't mean they'll get what they want- There's no doubt that their US stake is now the most valuable card they have on the table once they get rid of Vodafone Japan.