Vodafone denies planning $160 bln bid for Verizon
Monday, July 16, 2007; 9:06 AM
LONDON/NEW YORK (Reuters) - Wireless telecommunications company Vodafone Group Plc (VOD.L) denied a report that it was considering a $160 billion bid for Verizon Communications Inc. (VZ.N), a move that would consolidate ownership of their wireless joint venture.
The Financial Times reported in its FT Alphaville blog on Monday that Vodafone was considering such a bid, prompting Verizon's shares to jump more than 12 percent in premarket trade.
Verizon shares gave up most of those gains after Vodafone's denial, and were up only 1 percent at $42.21. Vodafone shares trimmed their earlier losses to trade down 0.25 percent at 163.04 pence.
"Vodafone wishes to make it clear that it has no plans to make such an offer," the company said in a brief statement.
Verizon spokesman Bob Varettoni declined to comment.
A $160 billion bid would represent a 32 percent premium to Verizon's market capitalization of about $121 billion at Friday's close.
Vodafone and Verizon have joint ownership of Verizon Wireless, the second-largest mobile service provider in the United States in terms of subscriber base. Verizon has said it was interested in taking full ownership of the profitable asset.
Atlantic Equity analyst Chris Watts said that regardless of whether Vodafone planned to make such an offer for Verizon, the report drew attention to Verizon's valuations amid a wave of merger activity in the telecom sector.
"It's going to highlight the value of the assets within Verizon at the moment," he said.
Verizon Wireless competes against AT&T Inc. (T.N), which took full ownership of its wireless division, formerly known as Cingular, after buying partner BellSouth Corp. late last year.
FT Alphaville, citing unnamed sources, said Vodafone had not yet approached Verizon with an acquisition plan, and there was no certainty a bid will be pursued.
(Reporting by Mark Potter and Ritsuko Ando)