Verizon reportedly refusing $38b offer for wireless stake

Verizon Communications made an offer of $38 billion to buy the 45% it did not already own of Verizon Wireless, only to see Vodafone Group demand $12 billion more, according to a Dow Jones report.

The Dow Jones report, citing The Daily Telegraph, said that Verizon approached Newbury, England-based Vodafone with a $38-billion bid.

However, Vodafone CEO Arun Sarin told the US company that it valued the asset at $50 billion, the newspaper reported.

The tax bill that a Vodafone asset sale could generate could be mitigated by Verizon selling its minority stake in Vodafone Italy, the paper also reported.

Verizon Communications had publicly stated on several occasions that it  was interested in buying the Verizon Wireless stake, the report said.

Vodafone, for its part, had not ruled out such a move, and expectations that it would sell the stake increased after it sold its Japanese arm, the report said.

A leading institutional shareholder of Vodafone backed the move to rebuff the offer, the report added.

"Although we are supportive of Vodafone selling out to Verizon, the indicative price of $38 billion is far too low," said David Cumming, head of UK equities at Standard Life Investments, which held nearly 2% of Vodafone shares.

Bear Stearns analyst Fanos Hiras said a $39-billion deal, its estimate of the Verizon Wireless stake's fair value, would hurt next year's earnings per share by over 6%, the report said.