Verizon and AT&T Mull Joint Takeover Bid for Vodafone
Published on: 2nd Apr 2013
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 US$245 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
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