Vodafone Bid Takeover Talk
Published December 2004
Here's The Scoop
(Source: 5 Star News) - The misinformation and confusion over whether or not the US mobile phone company Verizon Wireless, part owned by Vodafone, is going to muscle in on the $35bn (£18bn) merger of rivals Sprint and Nextel continued yesterday with hedge funds playing both sides of the story. Vodafone has made it plain, since speculation mid-week that its US venture might get involved, that it is not in talks with partner Verizon Communications about launching its US mobile operator into any form of bidding war.
Stateside investment bankers, however, are not to be daunted and talk of a potential bid was still doing the rounds yesterday with some people even whispering about Verizon Wireless mounting a hostile bid. But Vodafone, which owns 45% of Verizon Wireless, would be able to prevent the company buying Sprint if it felt that such a move was not in the interests of its shareholders. Certainly producing the financial muscle for a deal would put Vodafone's ongoing strategy of returning cash to shareholders in jeopardy.
Any counterbid for Sprint would have to be pitched at about $40bn, bankers reckon. But Verizon Wireless has plenty of capacity - both financially and in terms of spectrum - to keep expanding organically in North America and there is no strategic rationale for a deal. Despite that, Vodafone shares lost 1.25p to 138.5p yesterday as hedge funds with positions in the company's extremely liquid stock took a punt on continued speculation in the media of an imminent deal.
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