Vodafone Denies It is Weighing Verizon Bid

Vodafone Group PLC yesterday denied a newspaper report that it is considering making a $160 billion bid for its U.S. partner in the wireless phone business, Verizon Communications Inc.

The Financial Times reported earlier that the company was considering making an offer, but it cautioned that a bid may not emerge. Any such deal would create a business worth about $300 billion.

But Vodafone said there are no such plans. “Vodafone wishes to make it clear that it has no plans to make such an offer,” it said in a statement.

Any deal would be aimed at putting an end to speculation over Vodafone’s 45 percent stake in New Jersey-based Verizon Wireless, according to the newspaper. Newbury, England-based Vodafone, the world’s largest cell phone service provider, has been under pressure from a group of shareholders to deliver better value from the Verizon venture.

Verizon is one of the 20 largest employers in the Richmond- Petersburg Metropolitan Statistical Area, with about 2,300 full- time employees.

The newspaper said Vodafone was considering spinning off Verizon’s landline business to private-equity buyers for $90 billion, which would make it the largest leveraged buyout ever.

New York-based UBS analyst John Hodulik said an offer by Vodafone would be “extremely difficult” to get past U.S. regulators, especially because Verizon is a major provider of telecom services to the U.S. government. Private equity buyouts also are facing increasing congressional scrutiny.

Hodulik noted, however, that an acquisition of Verizon would eliminate a $20 billion tax liability Vodafone would face if it sold the stake outright.

ILLUSTRATION: CHART

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