Vodafone sticking to Verizon stake as talk of takeover is quelled
Thursday 04 April 2013
Vodafone has insisted that it is happy to retain its 45 per cent shareholding in its American joint venture, Verizon Wireless, and that shareholders in the British mobile giant should be patient about its future.
Speculation about Vodafone's relationship with Verizon, its partner in Verizon Wireless, has been raging for weeks. One report earlier this week claimed that Verizon could even be ready to launch a takeover bid for Vodafone.
But the US mobile firm yesterday slapped that down, declaring it did not "currently have any intention to merge with or make an offer for Vodafone".
Shares in Vodafone fell 3 per cent yesterday, down 5.85p to 186.15p, after that formal denial from Verizon.
Rumours about a possible takeover had seen traders chase up the FTSE 100 stalwart to a 12 month high of 198p earlier this week.
Although Verizon dismissed the idea of buying Vodafone, the US company reiterated that it is still interested in buying Vodafone's 45 per cent stake in their joint venture.
Analysts have estimated that could be worth as much as £70bn. But many analysts remain doubtful that a deal could happen soon as Vodafone and Verizon have an awkward relationship. It took years before Verizon first agreed to pay Vodafone a dividend two years ago.
The broker Oriel Securities said it was "very sceptical" because valuation is a major stumbling block.
Vodafone is also thought to gain major tax benefits at present by being able to offset profits from Verizon Wireless against historic tax losses.
In contrast, Vodafone would face a big tax bill if it sold Verizon Wireless because its value has soared.
A source close to Vodafone said that shareholders "should understand the power of the status quo" and there was no pressure on the company to change its shareholding, adding the 45 per cent Verizon Wireless stake is "a nice problem to have".
Vodafone's chief executive Vittorio Colao had come under pressure from activist investors to sell its stake in Verizon Wireless in 2010 but he believes that his decision to hang on to it has been vindicated.
Verizon is America's biggest mobile operator.
- 1 Sabrina Corgatelli: US hunting tourist posts picture of herself with dead giraffe after Cecil the lion outrage
- 2 Tom Cruise: Reporters banned from asking actor about Scientology
- 3 A-level results 2015: UK exam board OCR admits it 'estimates' hundreds of pupils' grades after papers 'go missing'
- 4 Dutch King Willem-Alexander declares the end of the welfare state
- 5 Giant Minion terrorises drivers in Ireland as 40ft inflatable blocks traffic on Dublin road
Edward Heath 'raped 12 year-old boy at Mayfair flat'
Sabrina Corgatelli: US hunting tourist posts picture of herself with dead giraffe after Cecil the lion outrage
'Gene drive': Scientists sound alarm over supercharged GM organisms which could spread in the wild and cause environmental disasters
Labour leadership race: Jeremy Corbyn could be the next Prime Minister, says Ken Clarke
Tom Cruise: Reporters banned from asking actor about Scientology
Is Britain really full up? Are migrants taking our jobs? Leading academic answers the most common anti-immigration claims
Calais Migrant Crisis: Deputy Mayor of Calais labels Cameron's use of 'swarm' as 'racist' and 'ignorant'
Chris Leslie: Jeremy Corbyn's anti-austerity agenda will harm the poor, says Labour shadow Chancellor
Landlords renting properties to illegal immigrants to face up to five years in prison
While we fixate on Calais, the Home Office is quietly deporting dozens of migrants on 'ghost flights'
Calais crisis: The seven claims made about the migrants - and the reality
iJobs Money & Business
£35 - £50k DOE: Guru Careers: A Tax Manager / Accountant (ACA / CA / CTA) is n...
£35000 - £37000 per annum + benefits: Ashdown Group: Contracts Executive - Cit...
£20000 - £25000 per annum + OTE £45K: SThree: SThree Group have been well esta...
£21000 per annum: Recruitment Genius: This is an exciting opportunity to join ...