Verizon and AT&T Mull Joint Takeover Bid for Vodafone
Published on: 2nd Apr 2013
Note -- this news article is more than a year old.
By: Ian Mansfield
Vodafone shares jumped following a report that the company could become for the first time in its history the target of a takeover bid.
Citing usually reliable sources, the Financial Times wrote that US giants, Verizon and AT&T are working on a joint bid for the company, which they would then split amongst themselves.
The bid would -- if taken seriously -- value Vodafone at around a 40 percent premium to its current shareprice, which is seen as being seriously undervalued at the moment. The company's entire capitalisation being roughly what its 45% stake in Verizon Wireless is thought to be worth on its own.
The FT noted that such a bid would give Vodafone an enterprise value of around USD245 billion.
The basic idea would be that Verizon takes Vodafone's 45 percent stake in their Verizon Wireless joint venture while AT&T takes the rest - minus Verizon Wireless' own holdings in some non-US Vodafone subsidiaries.
The audacious bid would be a role reversal for Vodafone, which tried to launch its own bid for AT&T Wireless back in 2004.
A potential merger between Vodafone and Verizon reportedly broke down when the two sides could not agree on management and headoffice issues -- so a takeover bid by the US giants is likely to be a hostile one, unless AT&T were to be willing to cede significant management control to what would become it European subsidiary.
On the web: Financial Times