Report: AT&T sniffing Vodafone's European wireless biz

AT&T (NYSE:T) would be interested in exploring options for Vodafone's assets following a potential deal between Vodafone and Verizon Communications (NYSE:VZ) in which Vodafone would sell its 45 percent stake in Verizon Wireless to Verizon, according to a Bloomberg report.

The report, citing unnamed sources, said AT&T is only interested in Vodafone's wireless holdings and would be hesitant to proceed if Vodafone expands in cable and fixed-line businesses. Vodafone has in fact been moving down that road, including via its recent purchase of German cable operator Kabel Deutschland in a $10.2 billion deal and the 2012 purchase of Cable & Wireless Worldwide for $1.8 billion.

The report comes on the heels of Vodafone's confirmation that is holding talks with Verizon on possibly selling its Verizon Wireless stake, though no deal may come to fruition. However, citing unnamed sources familiar with the matter, the Wall Street Journal reported that a deal could be completed within a week, and reports valued the deal as high as $130 billion.

AT&T and Vodafone declined to comment, according to Bloomberg.

This isn't the first time AT&T has been connected to interest in European wireless assets. According to a variety of reports from earlier this summer, AT&T has expressed interest in Telefónica's O2 UK unit and its Latin American businesses as well as EE, the U.K. joint venture between France Telecom and Deutsche Telekom.

AT&T CEO Randall Stephenson in June declined to comment on any specific M&A activity, though he reiterated his belief in opportunities outside the United States. Specifically, he said Europe is one of the largest consumer markets in the world, but that LTE coverage there has lagged the U.S. market. "Would we like to participate in that? I've said AT&T would love to participate in it. Is it by M&A? I don't know," he said at an event at the Brookings Institution.

Sanford C. Bernstein analyst Robin Bienenstock wrote in a research note that AT&T might pay as much as $124 billion to acquire Vodafone's non-Verizon Wireless assets. Verizon Wireless has consistently been one of the strongest items on Vodafone's balance sheet, which has been weighed down by units in Europe that have taken hits because of the continent's ongoing economic turmoil.

Meanwhile, the Journal reported that Verizon has scheduled a board meeting to consider a possible deal with Vodafone for Verizon Wireless. Verizon is looking to line up as much as $50 billion in financing for the deal, reports said, including $20 billion in bond offerings, according to analysts.

For more:
- see this Bloomberg article
- see this WSJ article (sub. req.)
- see this second WSJ article (sub. req.)
- see this third WSJ article (sub. req.)

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