Verizon Communications (NYSE:VZ) quashed a report that it plans to make a bid for Vodafone's assets with AT&T (NYSE:T) in a deal valued at $245 billion. However, Verizon reiterated it still has an interest in buying Vodafone's 45 percent stake in Verizon Wireless.
Citing unnamed sources, the Financial Times had reported that Verizon considered buying Vodafone's 45 percent stake in Verizon Wireless while AT&T would take on Vodafone's non-U.S. assets. Such a deal would represent a 40 percent premium on Vodafone's share price, and would dwarf the next biggest takeover in history, AOL's $182 billion deal for Time Warner in 2000.
Verizon flatly denied the report and said it does not "currently have any intention to merge with or make an offer for Vodafone, whether alone or in conjunction with others," Verizon said in a statement. Representatives from Vodafone and AT&T declined to comment on the report or Verizon's statement, according to Bloomberg.
Verizon executives have long indicated their interest in taking full control of Verizon Wireless and have blamed the media for stoking speculation about mergers or deals with Vodafone. Vodafone shares rose as much as 6.1 percent Tuesday after the report broke but have since fallen back down.
Even if such a mammoth deal were approved by regulators, it would be difficult to finance, notes the Wall Street Journal. Such a deal for Vodafone's assets would carry a price tag of roughly $120 billion, which AT&T would need to pay for with a combination of stock and debt, according to analysts at UBS. Further, it would enmesh AT&T in markets where it has no background.
In January the Journal reported that, according to unnamed sources, AT&T was hunting for merger and acquisition opportunities in the European wireless market. AT&T CEO Randall Stephenson has expressed interest in accelerating LTE deployments across the Atlantic and bringing U.S. pricing models to Europe.
- see this AP article
- see this FT article (sub. req.)
- see this Bloomberg article
- see this WSJ article (sub. req.)
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