Verizon Wirelesss cancels £3.5bn US share flotation

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The Independent Online

Further evidence of the deteriorating market for telecoms equity issues emerged yesterday when Verizon Wireless, which includes Vodafone's US mobile assets, cancelled a $5bn (£3.5bn) share offering that had been expected to take place before the end of the year.

Further evidence of the deteriorating market for telecoms equity issues emerged yesterday when Verizon Wireless, which includes Vodafone's US mobile assets, cancelled a $5bn (£3.5bn) share offering that had been expected to take place before the end of the year.

That coincided with growing doubt about whether Blu, 20 per cent owned by British Telecom and Italy's smallest cellphone group, would participate in the Italian auction for next generation mobile licences.

In a joint statement released overnight on Monday, the two companies said: "Vodafone and Verizon Wireless have agreed that, despite Verizon Wireless' strong third-quarter subscriber growth, recent volatility of capital markets has created an environment in which it is prudent to defer the offering." Analysts expect the flotation will remain on the sidelines until next year.

In Italy, BT was involved in high stakes back-room negotiations with Italy's Benetton textile group, which controls Blu via a 32 per cent stake held through its Autostrada motorway unit. Banco Nazionale del Lavoro and Mediaset, which together own 16 per cent of Blu, and Benetton are thought to be interested in selling the mobile group to BT, rather than spend a further minimum of £1.2bn to bid in Italy's mobile auction.

The uncertainty over Blu has cast a shadow over the Italian auction, scheduled to begin tomorrow. Salvatore Cardinale, Italy's communications minister, may cut the number of licences on offer to four from five should Blu pull out, leaving five bidders.

BT is interested in a controlling stake in Blu but faces difficulty in raising the funds given its £30bn debt and the multi-billion pound cost of securing a next generation licence and building a network. BT shares fell 5.3 per cent to 682p. Vodafone fell 4.1 per cent to 252p.

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