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Vodafone investors want bigger bid or full takeover by Verizon

Six big investors Vodafone said $ 100 billion is not enough for the participation of British society in its U.S. joint venture with Verizon Commun...

 

Vodafone investors want bigger bid or full takeover by Verizon

Six big investors Vodafone said $ 100 billion is not enough for the participation of British society in its U.S. joint venture with Verizon Communications, and urged it to come up with a range of at least $ 120 billion.

Their comments followed a Reuters report Wednesday that Verizon had hired to prepare for a possible bid $ 100 billion to buy 45 percent of Vodafone in their joint venture of Verizon Wireless, which may be structured as a case about advisers 50:50 and stock offer.

If the figure are 100 billion, six shareholders, with about 1.3 billion shares of Vodafone they said they would prefer the British group to insist on a full merger Verizon instead.

The main concern of investors contacted by Reuters was the fact that sales of Verizon Wireless – the best thing about the show later in the Vodafone portfolio -. , the exposure of individuals in European markets in trouble

“Without being too disrespectful mark (Vodafone), sitting with a pretty ugly set of assets once you lose the game Verizon Wireless,” said Ralph Brook-Fox, UK shares manager at Ignis Asset Management, a top 40 institutional shareholder Vodafone.

“I think the merger or the scenario of full recovery, but not at the forefront of discussions at this time, would actually end up being more acceptable agreement.”

Verizon Communications has issued a statement earlier this month to say that he did not intend to merge or make an offer for Vodafone speculation after submission.

The share of Verizon Wireless Vodafone

accounted for about half of the adjusted income of the British group in the six months to end-September 2012, according to financial results.

He also received before the end of 2012, a dividend of £ 2.4 billion on its stake in Verizon Wireless, and said he was going to spend £ 1.5 billion to its shareholders through a buyback program that the importance of participation group.

In the European core of Vodafone operates in operations affected by the crisis and the highly regulated markets such as Italy, Spain and Portugal, where sales have been caused by economic turmoil and intense competition under pressure.

With this in mind, investors contacted by Reuters prefer to bid for participation in between $ 120 billion and $ 135 as acceptable. At its current share price, the market capitalization of all Vodafone is about $ 146 billion.

“I think … $ 120 billion is the point where you think you have a decent premium,” a top 20 shareholder said on condition of anonymity. “I think it is reasonable and if they succeed in this, I think the shares (Vodafone) rise.”

Another big question for Vodafone and its shareholders is the possible tax invoice for the sale of its interest would suffer: between $ 5000000000 and $ 25

. The range is due to a lack of clarity on that company Vodafone hold assets – for example America Vodafone holds assets in a number of other countries – from outside the company is not able to say believe how much tax should be paid.

Exclusive: Verizon eyes roughly $100 billion bid for Verizon Wireless stake

 

Exclusive: Verizon eyes roughly 0 billion bid for Verizon Wireless stake

Verizon Communications Inc. has hired advisers to prepare for a possible total of 100 billion dollars cash and stock to offer complete control over Verizon Wireless joint take venture partner Vodafone Group Plc two people familiar with the situation said on Wednesday .

Verizon, which already owns 55 percent of Verizon Wireless, has a proposal for Vodafone not yet filed, but the two banks and legal advisors hired for a possible bid, the sources said.

Verizon hopes to reach an amicable agreement on talks with Vodafone but is willing to take as the British company is not involved in the negotiations, one of the sources. Public auction

There is no guarantee that Vodafone will be in a contract or offer is realized according to the same sources. Interested

In the last decade, Verizon has little secret of his desire to his British partner of the joint venture, which is made to buy the No. 1 U.S. mobile operator. The sources said that Verizon is ready to aggressively push an agreement.

Verizon, taking advantage of the historically low interest rates and the strong share price, is convinced that the company could raise about $ 50 billion in bank financing, the sources rate. Use He plans to pay for the rest of the contract with its own shares, they added. The sources requested anonymity because the talks are confidential.

is expected to be held before the annual meeting of shareholders, one of the sources. Governance of Verizon

to discuss the details of a possible buyout Verizon Wireless next week at a meeting scheduled

Verizon spokesman Bob Varettoni declined to comment, but the statement said the U.S. telephone earlier this month, which he said it would be a buyer of their company Verizon Wireless Vodafone.

Verizon Wireless and Vodafone were not immediately available for comment Wednesday.

The challenge Verizon Wireless is about two-thirds of the market capitalization of Vodafone in the intended use. The company also offers Vodafone exposure to the U.S. market in full swing. But Vodafone has studied what to do with his involvement as CEO Vittorio Colao streamlines a company built on the foundations of the aggressive expansion.

Analysts said the sale of its stake in Verizon Wireless, Vodafone will be distributed to the shareholders, the purchase of fixed assets in Europe and to make the company an attractive takeover target for other telecom giants like AT & possible money back , T Inc.

For Verizon Communications, which is based on the activities of Verizon Wireless for growth, ownership give him much more flexibility because of the cash generated by the mobile business.

New Street analyst Jonathan Chaplin said he expects to ask Vodafone more but $ 100 billion was a good starting point.

“This is a good time for both parties to seriously consider a transaction. Vodafone is likely to ever get a better multiple than now,” said Chaplin. “Growth (Verizon Wireless) is likely to slow down over time, especially as Sprint and T-Mobile USA and AT & T better. “

Verizon came close to a deal in 2004 when Vodafone tried to buy AT & T Wireless, Cingular but lost sales at auction. This Agreement may Vodafone would bring its brand across the Atlantic and should be 45 percent to sell in Verizon Wireless.

If an agreement were to happen now, it would come at a time where the telecommunications industry has recently experienced a new round of consolidation efforts. MetroPCS Communications Inc. shareholders voted to approve a merger with Wednesday No.4 U.S. wireless provider T-Mobile USA, a subsidiary of Deutsche Telekom AG.

The merger came after 2011 effort Deutsche Telekom to sell to AT & T T-Mobile for $ 39 billion has been blocked by the U.S. antitrust supervisors. Verizon would likely encounter similar obstacles redemption of Verizon Wireless.

Meanwhile, Dish Network Corp., the supplier of the U.S. satellite No.2, last week offered to buy wireless carrier Sprint Nextel Corp. for $ 25 billion in cash and 5 shares, challenge a proposed between Sprint and Japan’s Softbank Corp.

BUILDING TAX transaction

One of the major obstacles to an agreement was up here hoping that Vodafone a tax bill of $ 20 billion to make if its interest, which means that Verizon would have to pay to sell it for the British company to make the effort a high price.

But according to the sources of a transaction is structured to achieve a final tax assessment likely $ 5000000000 or less.

According to the plan, Verizon would the U.S. holding company to acquire Verizon Vodafone importance of the British band wireless and certain other assets in countries like Germany and Spain have the sources said. This structure would order from Verizon enjoying a provision of the tax in the Netherlands called substantial relief for shareholders, they said.

exempted under certain conditions for capital gains realized on the sale of shares in companies in which the seller owns at least 10 percent of the stock and the amount of stock owned for at least a year, according to Robert Willens, an expert from New York accounting and tax and a professor at Columbia Business School.

Verizon Chief Financial Officer Fran Shammo said last week that he was convinced that they could buy without significant tax implications. Vodafone game He did not say how it would work.

“The proposed tax of $ 5000000000 legislation is in line with our estimate of the taxes they have to pay for individual international issues of Vodafone subsidiary which owns Verizon Wireless, “said Chaplin.

DEAL FINANCING

Verizon shares have risen has easily surpassed his young colleagues this year about 20 percent so far its wireless business in terms of profitability and growth of the customer, and the face of rising hope that it will buy the rest. Verizon Wireless

investors say that the conditions for an agreement have improved after the successful acquisitions Verizon’s stock prices and the low interest rates.

Any agreement that such an important part of the stock includes, however, mean dilution for the shareholders of Verizon Communications.

If the contract is for $ 100 billion, Chaplin said it would increase Verizon Communications in 2014 to finance. earnings per share by 25 percent, even after diluting the stock Verizon payments and interest on the part of the agreement by debt

“It would be the largest investment ever to be in debt but we think it could be done, “said Chaplin.

The sources said that Verizon has not launched a formal fundraising effort, but barriers to raise money for a deal.

So far no money this year, Vodafone shares rose about 23 percent after trailing in the last months of 2012. Recent acquisitions have been attributed by analysts to sell hopes participation in Verizon.