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Verizon in Talks to Buy Out Vodafone (Yet Again)
by Karl Bode 08:24AM Thursday Aug 29 2013
On again, off again negotiations to have Verizon acquire Vodfone's 45% stake in Verizon Wireless are on again. According to a report in the Wall Street Journal, Vodafone has confirmed that the two companies are negotiating again, with Verizon likely to have to shell out in excess of $100 billion for Vodafone's share. Vodafone is currently looking for around $130 billion for the share. Sources tell the Journal that Verizon is currently in negotiations with banks to borrow whatever additional cash the company may need to complete the deal.

Update: Bloomberg seems to think we're beyond the usual negotiation rumors we've seen for years, and that a deal could be announced by next week.

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ITALIAN926

join:2003-08-16
kudos:2
Reviews:
·Verizon FiOS

1 recommendation

Our favorite guy

»www.bloomberg.com/video/craig-mo···msnmoney lol

rit56

join:2000-12-01
New York, NY

Debt

Well now, Verizon will have to recoup that debt somehow. Lets see....... Higher prices, worse plans..... they are already really good at screwing their customers. I can't wait to see what they come up with after this.

miataman

join:2010-10-27
Chelmsford, MA
kudos:1

Re: Debt

The onward march of un-divestiture! Where's Judge Greene when you need him. LOL
--
"My hat, my cane, Jeeves".
TBBroadband

join:2012-10-26
Fremont, OH
Reviews:
·AT&T U-Verse
·MegaPath

Re: Debt

But Judge Green only ordered the landline business to be split. Not wireless And it shouldn't be split at this moment as there are many other options to choose from; yes; including MVNOs are options as they do provide a lower cost service for the same features and at times must better customer service.

miataman

join:2010-10-27
Chelmsford, MA
kudos:1
Reviews:
·Verizon FiOS

Re: Debt

said by TBBroadband:

But Judge Green only ordered the landline business to be split. Not wireless

LOL, Either wireless didn't exist, or was in it's infancy at the time. However, a wise man could,ve read the future and seen that it would probably need divestiture some day!
--
"My hat, my cane, Jeeves".

FFH5
Premium
join:2002-03-03
Tavistock NJ
kudos:5
said by rit56:

Well now, Verizon will have to recoup that debt somehow. Lets see....... Higher prices, worse plans..... they are already really good at screwing their customers. I can't wait to see what they come up with after this.

Prices are going to go up. But they were doing that anyway.
--
"If you want to anger a conservative lie to him.
If you want to anger a liberal tell him the truth."

Moropo
Premium
join:2002-07-28

100-130B for 45% share?

So maybe my question shows my ignorance of the finance world, but:

VZ currently has a market capitalization of 138B, how could it pay 100-130B for 45% stake?
TBBroadband

join:2012-10-26
Fremont, OH

Re: 100-130B for 45% share?

If they want the other part of CellCo they'll pay Voda what they want. Otherwise they won't get anything.
tanzam75

join:2012-07-19
said by Moropo:

VZ currently has a market capitalization of 138B, how could it pay 100-130B for 45% stake?

By issuing stock to Vodafone, and by issuing bonds.

Remember that the new Verizon would be larger than the current Verizon, by $100-130 billion. The new Verizon would also have greater profit, because it will have the additional income from 45% of Verizon Wireless.
dplantz

join:2000-08-02
Roslindale, MA

what a waste of money here

I would rather see them spend the money to bring FIOS to the whole verizon wireline footprint then buy out the Vodfone share
Sahrin

join:2004-05-15
Houston, TX

This will kill Verizon's network

The Vodafone ownership is the single biggest reason that Verizon's network is as good as it is. Because they would have to share profits with Vodafone, Verizon blocked 'dividend payments' from VZW's profits and spent the money on network upgrades (whereask AT&T et al would just pocket the surplus).

By unifying ownership, Verizon will now be able to pocket the money from VZW - less money means slower network buildouts.

On top of all that, if they use every cent of free cash on their balance sheet Verizon will have to borrow $90+ billion dollars, more than tripling their current debt load. This will immediately halt any capital projects, because they won't be able to borrow anymore.
tanzam75

join:2012-07-19

Re: This will kill Verizon's network

That's at the corporate level.

However, Verizon Wireless would continue to be a subsidiary -- albeit a wholly-owned subsidiary. It could issue its own bonds, which would be secured by Wireless assets, and which would have priority over corporate-level bonds.
Sahrin

join:2004-05-15
Houston, TX

Re: This will kill Verizon's network

You can't secure a loan with assets that are already being borrowed against. Verizon's purchase of VZW is secured with VZW - if Verizon fails to pay the bank for the M&A loan the bank seizes the wireless division.

CaptainRR
Premium
join:2006-04-21
Blue Rock, OH

Its anounced

»bigstory.ap.org/article/vodafone···-verizon

batterup
I Can Not Tell A Lie.
Premium
join:2003-02-06
Netcong, NJ

Done.

Now how long before wierless spins off from wireline? Leaving wireline with the debt, the union, the regulations and other bother.