Vodafone Potentially Taken Over in the US

The following article is an extract from http://news.sky.com/story/1085516/verizon-dials-up-funds-for-100bn-vodafone-bid which was written by Mark Kleinman. In summary the American giant Verizon are looking to buy out Vodaphone’s share in the company. Vodafone are one of the largest telecom providers globally and already freestanding in many companies.

The American telecoms group Verizon is lining up funds for a blockbuster $100bn bid to buy Vodafone out of their US mobile phone joint venture.

Insiders told Sky News on Wednesday that Verizon’s board had asked banks to present potential financing options this week for a deal to take full control of Verizon Wireless, which would rank as one of the biggest corporate takeovers in history.

A meeting of Verizon’s board has also been scheduled for this week. Banks including JP Morgan are understood to be preparing to offer some of their biggest ever loan facilities to help finance a potential deal, according to senior bankers.

Speculation about a sale of the Vodafone stake has been growing in recent weeks, but the disclosure that Verizon is asking banks to table financing solutions offers further evidence that a formal offer is likely to be made in the near future.

The biggest obstacle to an agreement between Verizon and Vodafone remains their respective valuations of Verizon Wireless, with the British company expecting as much as $135bn for its share of the US’s biggest mobile network.

Verizon’s interest is being accelerated to allow it to take advantage of red-hot debt markets, which should enable the company to borrow at least $50bn, or roughly half the price it plans to offer Vodafone. Verizon would probably borrow the money from a large lending syndicate before issuing several tranches of bonds, according to people close to the situation.

The American company has intensified pressure on its British partner to come to the negotiating table by signalling its belief that it can structure a deal that would not incur a major tax liability for Vodafone.

Vodafone is being advised by Goldman Sachs and UBS, its long-standing financial advisers, on the developing situation.

If a deal does get agreed, Vodafone would probably return a chunk of the proceeds to its shareholders that might qualify as the biggest such handout in corporate history.

Verizon declined to comment.

The plans look indefinite at this point. A large hold on progressing the deal centres around the proposed $100bn bid with the expected $135bn worth in shares. Keep up to date with our posts on Vodafone through the news section and subscribe to our other sites.


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