Vodafone investors say they want more for shares in Verizon Wireless or a full takeover
Six major Vodafone investors have reportedly said $100 billion (£65bn) would not be enough for Verizon Communications to acquire the British operator’s 45 percent stake in their Verizon Wireless joint venture.
It was reported last week Vodafone was bracing itself for a bid with the £65 billion figure designed to bring Vodafone to the table rather than amount to a final offer.
Verizon has hired both banking and legal advisers ahead of a possible bid, but Vodafone is reportedly hostile to the idea because of the possibility of a capital gains tax bill of up to $20 billion (£13bn).
The six investors, who control 1.3 billion Vodafone shares between them, would welcome a bid of between $125-135 billion (£81-87bn) or even a full merger between the two companies that would minimise the tax liabilities.
Another concern about Verizon’s bid is that it would expose Vodafone to problems with its European operations. Its share in Verizon Wireless accounted for around half of its operating profit leading up to September 2012, offsetting the troubles caused by the economic problems and intense competition in markets like Spain, Italy and Greece.
However, there could be some advantages. Vodafone could return some of the money to shareholders and invest in fixed line assets in Europe. Meanwhile, a Vodafone with no US mobile business would be a much more attractive target for a takeover by AT&T, which is rumoured to be in the market for a European operator.
Earlier this month, Verizon denied it was interested in a takeover or merger, but has long coveted taking full control of Verizon Wireless. It has been in high level talks with Vodafone to discuss a range of options, while the issue will be brought up at Verizon’s annual shareholder meeting.
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