Verizon says Vodafone stake too excessive

[jones]

https://registration.ft.com/registra...0abe49a01.html

[Critic]

That was a waste of a link. In future, please indicate if registration is required to view the article...

[Fire14]

I am just curious what Verizon feels is a "Fair Value" for the Vodafone stake?


Verizon CFO Doesn't See Vodafone Deal In Near Term

It's unlikely that Verizon Communications will buy out Vodafone Group's stake in its U.S. wireless business, Verizon Chief Financial Officer Doreen Toben said Tuesday.

Analysts' estimates over the value of Verizon Wireless, the No. 2 wireless carrier in the U.S., are well above the premium, she said during an analyst conference hosted by Morgan Stanley in Washington, which was Webcast.

Verizon has openly expressed its interest in buying out Vodafone's 45% stake in the joint venture. But Toben said Verizon would be "willing to consider paying what we reflect is the fair value".

"Vodafone knows where we stand," she said, declining to comment further on the level of discussions held.

Toben said she looks at what Verizon Wireless is worth, factoring in its multiples during the next few years and determining whether the acquisition would add to earnings in the first year.

Various media reports, mainly through the U.K., have had bids ranging from $38 billion to $50 billion coming out of Verizon for the stake. In the past, Verizon has been a shrewd acquirer, unwilling to overpay for an acquisition.

On Verizon's high-speed Internet business, Toben said she doesn't expect to lower the price of its digital subscriber line, or DSL, service. It currently costs as little as $15 a month.

"There's enough discrepancy between us and cable," she said.

The lower price point has won over dial-up customers. Once the customers have switched over, their retention rates improve, she added.

Like the other phone companies, Verizon continues to lose access lines. Those losses could widen this year, Toben said, although she declined to be more specific. There likely won't be a point where the phone companies start to add access lines. Instead, Verizon is focused more on metrics such as average revenue per user, she said.

[jones]

Originally Posted by Critic

That was a waste of a link. In future, please indicate if registration is required to view the article...

i can click it w/o registration.


Verizon signals Vodafone stake deal is unlikely
By Paul Taylor in New York
Published: May 24 2006 03:00 | Last updated: May 24 2006 03:00

Verizon Communications, the US telecommunications group, signalled yesterday that it was not willing to pay an excessive premium for Vodafone's 45 per cent stake in Verizon Wireless and did not expect to acquire the stake in the near future.

Doreen Toben, Verizon's chief financial officer, told analysts and investors attending a Morgan Stanley media and communications conference in Washington: "We do not anticipate any transaction in the near future.''

[agentHibby]

Jones is right no need to register for this article.

Sometimes to read the whole article at FT.com you do have to get a pay for it.

[bobolito]

Critic is correct. You do need to register if you want to read the whole article, or else you just get a small portion of it like the first two sentences.

To read the rest of this article
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[KeithJamesMc]

I listened to the presentation by Doreen Toben, basically she was saying that Verizon doesn't feel the need to pay a premium since they are in overall control and the valuation should be at Sprint/Nextel & SBC/BellSouth deal level.

She was quite explicit that VOD know the valuation and the ball in their court.

I can't see a deal being done at before next weeks Vodafone (May 30th) strategy presentation. I expect Arun Sarin to say the same old line, happy with Verizon Wireless but will exit at right price.

I think VOD's price for the 45% is US$48bn (excluding debt)

[ShoresGuy]

This transatlantic tug-a-war game is getting really tiresome. There's nothing but speculation about the possible buyout of the Vodafone stake on Verizon's part. The fact is that Vodafone is also busy worrying about their European assets and how they can keep up with the likes of T-Mobile in countries where they are in constant competition (i.e. here in Germany).

On the other hand, it really makes one wonder what the heck Vodafone is hoping to gain by delaying their future strategy for the US. They can't gain control of the majority stake in VZW and they definitely won't leave the US market since that would mean losing out to T-Mobile and a potential chance of gaining a strong foothold in the North American arena.

[Fire14]

Originally Posted by ShoresGuy

On the other hand, it really makes one wonder what the heck Vodafone is hoping to gain by delaying their future strategy for the US. They can't gain control of the majority stake in VZW and they definitely won't leave the US market since that would mean losing out to T-Mobile and a potential chance of gaining a strong foothold in the North American arena.

I agree they must have something in the works to even consider letting Verizon buy them out at this time.

It's just a matter of who they are trying to strike a deal with to possibly become a full time player here in the U.S., maybe Suncom or another small company & looking at the auction for the spectrum to expand?

Anything is possible & I am sure it will get interesting in a few months to a year (Unless the shareholders are that greedy & don't care if they get out of the U.S. Market for a few dollars)

[scotsboyuk]

Vodafone are really in a win win situation with their Verizons take. If they keep it they are able to draw income from it, if they sell it they are able to amass a large pile of cash to invest in the rest of their business. The ball is really very much in Verizon's court here.

I doubt Vodafone would want control of Verizon anyway, they have already committed to a CDMA future, which would mean a headache for Vodafone if they did gain control.

If Vodafone do sell their stake then there options are to either leave America or face a costly re-entry. I suppose, in theory at least, Vodafone could look to make a hostile takeover of another network, perhaps Cingular? If not they would have to look to acquire smaller networks and build them into a national network, but that would be very expensive. Having said that, if there is a network able to take on such a massive project, it is probably Vodafone.

[Etorres777]

I think they should just sell and buy regional carriers and just build out.

[Etorres777]

Originally Posted by scotsboyuk

If Vodafone do sell their stake then there options are to either leave America or face a costly re-entry. I suppose, in theory at least, Vodafone could look to make a hostile takeover of another network, perhaps Cingular?

I doubt it, you really think at&t is willing to let go of Cingular after them spending so much money on trying to buy BellSouth for complete control of the company to just sell it off?

[scotsboyuk]

Originally Posted by Etorres777

I doubt it, you really think at&t is willing to let go of Cingular after them spending so much money on trying to buy BellSouth for complete control of the company to just sell it off?

In business everything seems to have a price so perhaps if they were made the right offer ... Then again I wonder if Vodafone would be able to initiate a hostile takeover of AT&T itself? I'm not terribly familiar with AT&T, is that something that is even remotely possible?

I suppose this whole debate really hinges on how committed Vodafone are to the American market. Their options are somewhat limited and expensive to say the least. Having said that, they may not want to simply allow their biggest rival (T-Mobile) to operate in the U.S. without some sort of competition from Vodafone.

[ShoresGuy]

The answer is probably no since SBC was the reason of why Vodafone lost out on the original AT&T auction bid in the first place back in 2004. AT&T is on the way up again after being split up from a national monopoly by the FCC in 1984. SBC (one of the former so-called regional Baby Bells) has been acquiring most of the regional Baby Bells to regain some control over the landline sector and also to strengthen their interest in the join venture with BellSouth namely Cingular Wireless. SBC owns the majority stake (60%) so that is how they were able to get to this stage.

As for what AT&T plans on doing in the immediate future to prevent Vodafone from becoming a hostile takeover threat, it remains to be seen. SBC had the money to beat them out in 2004 and they definitely have that clout now should push come to shove.

[agentHibby]

Originally Posted by scotsboyuk

In business everything seems to have a price so perhaps if they were made the right offer ... Then again I wonder if Vodafone would be able to initiate a hostile takeover of AT&T itself? I'm not terribly familiar with AT&T, is that something that is even remotely possible?

I suppose this whole debate really hinges on how committed Vodafone are to the American market. Their options are somewhat limited and expensive to say the least. Having said that, they may not want to simply allow their biggest rival (T-Mobile) to operate in the U.S. without some sort of competition from Vodafone.

They were thinking about this with Verizon in 2003 and 2004 to do a hostile takeover and spinoff the wireline. There would be so much anit trust hurdles for a forgein company buying that large of an American company that I doubt it would happen.

[Fire14]

Originally Posted by ShoresGuy

The answer is probably no since SBC was the reason of why Vodafone lost out on the original AT&T auction bid in the first place back in 2004. AT&T is on the way up again after being split up from a national monopoly by the FCC in 1984. SBC (one of the former so-called regional Baby Bells) has been acquiring most of the regional Baby Bells to regain some control over the landline sector and also to strengthen their interest in the join venture with BellSouth namely Cingular Wireless. SBC owns the majority stake (60%) so that is how they were able to get to this stage.

As for what AT&T plans on doing in the immediate future to prevent Vodafone from becoming a hostile takeover threat, it remains to be seen. SBC had the money to beat them out in 2004 and they definitely have that clout now should push come to shove.

Well with AT&T Now in the process of buying Bell South to gain 100% control over Cingular I really doubt they would let Vodafone try to get any of Cingular & would be that much harder to do, especially after they finish the merger.
I really doubt they would have the money even with the Verizon money to buy them out & the scrutiny of a foreign company buying an icon like AT&T could be even worst.

[scotsboyuk]

@Fire14

I think the governmental scrutiny would probably be a bigger problem than the money, Vodafone haven't done too badly in finding money for large acquisitions in the past.

It's a jolly interesting question as to what they will do if they sell their Verizon stake. Vodafone would be unlikely to want to compete on anything less than national terms, but that is going to involve massive amounts of money however they choose to do it. Then again, if Vodafone has the willpower you may see another national network in the not so distant future.

Personally I'd rather like Vodafone to have a U.S. network, it would make it cheaper for me when I'm in America!

[Fire14]

Originally Posted by scotsboyuk

@Fire14

I think the governmental scrutiny would probably be a bigger problem than the money, Vodafone haven't done too badly in finding money for large acquisitions in the past.

It's a jolly interesting question as to what they will do if they sell their Verizon stake. Vodafone would be unlikely to want to compete on anything less than national terms, but that is going to involve massive amounts of money however they choose to do it. Then again, if Vodafone has the willpower you may see another national network in the not so distant future.

Personally I'd rather like Vodafone to have a U.S. network, it would make it cheaper for me when I'm in America!

I figure it would cost them close to 75 to 100 Billion if they tried to buy out AT&T including the wireless end, that's a lot of money for anyone to drum up but your right they may have the ability to do this, and the biggest problem would be Govt. approval.

As for them having a network here, I would love to see another National Carrier to put more pressure on the other carriers to lower prices & improve coverage even more then they already are doing (it's pretty competative now with Verizon & Cingular alone).

The next National carrier though I would like to see is Alltel.

But for people in numerous countries including here I can see how Vodafone have a network here can benefit people on both sides of the pond & beyond for coverage & roaming abilities.

[agentHibby]

You are talking over 150 billion for AT&T if Vodafones buys.

I doubt Vodafone is thinking about AT&T
They would probably try to buyout T-Mobile in the US before they would buyout AT&T