Mobile phone carrier Vodafone Group is considering a mammoth $160 billion takeover bid for Verizon Communications, its partner in Verizon Wireless, the Financial Times reports on its Alphaville website. UK-based Vodafone in a brief statement Monday denied the report, saying it has no such plans. The plan, according to the FT, would be to spin-off Verizon's fixed-line holdings to private-equity groups in order to focus only on wireless. The FT said Vodafone has not yet approached Verizon, and that there's no certainty it will. A combined Vodafone/Verizon would carry an market cap of about $300 billion, bigger than the world's current number-one telecom carrier AT&T. Shares in Verizon spiked briefly to $47 (+12.5%) on the rumor, but have since retreated to $42, up 0.9%. Vodafone ADRs are off 0.6% to $33.33 in the pre-market.
Sources: FT Alphaville, Reuters
Commentary: Verizon: More Upside Ahead In Wireless • Is Verizon Coming Closer to Owning Verizon Wireless? • Vodafone Activists Should Show More Patience - Barron's
Stocks/ETFs to watch: Verizon Communications Inc. (VZ), Vodafone Group plc (VOD). Competitors: AT&T Inc. (T). ETFs: PowerShares Dynamic Telecom & Wireless ETF (PTE), HOLDRS Wireless (WMH)
Conference call transcripts: Verizon Q1 2007, Vodafone Group FY 2006
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