Vodafone Investors: $100B Is Not Enough

For a transaction that lacks an actual bid and whose rumors have largely been denied for years, this sure is starting to look like an auction. Late last week, it emerged that Verizon (NYSE:VZ, news, filings) may have hired advisers to put together a $100B bid for the 45% of Verizon Wireless still owned by Vodafone Group (NYSE:VOD, news, filings). But despite the fact that no actual bid is on the table, six major Vodafone investors are making their dissatisfaction with its supposed girth known.

The number that folks are putting on a successful bid is more like $120B, 20% more than the current rumor, with some seeing that as merely an opening salvo. But given the rather public nature of these ‘negotiations’, can anyone blame Verizon for trying to start the bidding *below* its maximum price? Actually, I’m impressed they are within 20% at this stage.

Vodafone’s entire marketcap is just under $150B even with all these rumors flying around, which tells you just how little folks like their non-US businesses right now. But I still think that even after returning a big piece of a VZ Wireless sale to shareholders directly there would be a lot left to do substantial European consolidation to shore up that position – you know, sell high and buy low and all that.

Of course, they’d have to *want* to step up and operate a lot more fiber and towers and spectrum directly, rather than just earn dividends on a minority share — which is obviously the much easier route.

 

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Categories: Mergers and Acquisitions · Wireless