Verizon Communications could be about to make a full control bid for Verizon Wireless as the company is already discussing the possibility with advisers. Sources said to be familiar with the matter have said a $100 billion cash and stock bid could be readied in order to acquire Verizon Wireless from the carrier’s current partner Vodafone.
At present Verizon Communications already owns 55% of Verizon Wireless and is said to have hired legal and also banking advisers to consider the bid. It’s not exactly a surprise that Verizon is thinking of buying out Vodafone and there have been murmurings of such a deal for several months. Now some UK-based analysts and investors are saying that Verizon Communications’ talks with advisers is likely to put Vodafone under pressure to seriously discuss the matter.
A report today also says that both sides involved have had “high-level talks” before about various options according to another inside source. Now though, it seems that Verizon Communications is ready to become bolder and push for a satisfactory deal. A source also says that Verizon Communications hopes any future agreement will be cordial but that if Vodafone appears disinterested then it will push more assertively.
Vodafone currently has a 45% stake in Verizon Wireless and chief executive Vittorio Colao of Vodafone is said to have an “open mind” regarding any such deal. However one drawback to any possible deal involves a tax bill of around $20 billion for Vodafone if a move goes through so to get Vodafone to agree Verizon would be compelled to pay a very high price. Sources say though, that a deal could be organized in a way that any tax bill could be brought down to around $5 billion.
It is reported that the Verizon board could be discussing this issue as early as next week, prior to its annual shareholder meeting. Verizon and Vodafone have both declined to comment so far. We’d like to hear any comments you have about the plan for Verizon Communications to achieve full control of Verizon Wireless so do send them to us.
Verizon in operator wars bid to lease Clearwire spectrum
It seems that operator wars are well in progress at the moment with everyone fighting over Clearwire. Verizon Wireless has now joined the fray and wants to lease Clearwire’s spectrum to strengthen its network. Details are scant at the moment but the deal could see Big Red pay more than $1.5 billion. However Verizon is not the only company interested in Clearwire and things are getting complicated.
Another major US carrier Sprint presently owns 50% of Clearwire and is vying to purchase the remaining stake so that its network is the one that benefits from Clearwire’s spectrum (formerly used for WiMAX), and of course it would bring the whole operation under one roof so to speak.
However there’s yet more competition in the form of Dish, which recently failed in a bid for Clearwire and is now complicating matters even further with a $2.25 billion offer to acquire Sprint, trying to beat Softbank which is also attempting a deal for Sprint. Dish now has plans to build a wireless network and has already acquired holdings from FCC spectrum auctions but it’s a messy business with resources so limited. We can’t see it getting any easier either as the only way to gain spectrum is to win at auction, lease or acquire it and as the LTE networks are expanded things will only get worse.
Dish has stated that its bid for Sprint is not dependent on Sprint acquiring the other stake in Clearwire and also that its own bid for Clearwire is still in the offing despite the fact that it was already turned down. It’s certainly a tangled web at the moment and it will certainly be interesting to see what pans out over the next few months.
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