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Some big Verizon (VZ -0.8%) shareholders seem comfortable with the carrier paying $120B-$130B to...

Some big Verizon (VZ -0.8%) shareholders seem comfortable with the carrier paying $120B-$130B to acquire Vodafone's (VOD -0.4%) 45% stake in Verizon Wireless. "No way do I dream that $100 billion is going to get this deal done," says Craig Leopold, whose firm (Columbia Management) owns 22M Verizon shares. He estimates even a $130B deal would lift Verizon's 2014 EPS by 15%. One big challenge: Verizon already has $52.9B in debt on its balance sheet, offset by just $9.5B in cash/investments. Even a 50/50 cash-stock deal for the stake would lead total debt to soar above $100B. (previous)
Comments (5)
  • Derek A. Barrett
    , contributor
    Comments (3534) | Send Message
     
    I just don't get how any company could take on that much debt and service it, I know rates are record low but still, that's an insane amount of debt.

     

    I doubt VOD is going to sell for anything less than 130 though, as much as VZ wants to hold our dividend for ransom.

     

    Long VOD
    6 May 2013, 01:27 PM Reply Like
  • Crusader XXI
    , contributor
    Comments (6) | Send Message
     
    I have a postion, though small, in each company.

     

    A $125B VZ buyout of the 45% VOD position will reward which shareholders the most? And at what future time will it be best to make wining/losing judgments?

     

    This amount seems to be almost unimaginable but we can understand VZ needing to sever this cord.
    6 May 2013, 04:09 PM Reply Like
  • Ruckusfan
    , contributor
    Comments (24) | Send Message
     
    VZ management should focus on . . . something else. Would VZW be more successful if it were owned 100% by VZ? Or would 100% ownership merely re-arrange some deck chairs?
    6 May 2013, 11:54 PM Reply Like
  • aeropater
    , contributor
    Comments (9) | Send Message
     
    I am long VOD and think that this approach by VZ is absolutely fabulous. I realize that VOD has several weak and under performing assets BUT $130B for a part of a $150B market cap company is the deal I would kill for.
    7 May 2013, 10:02 AM Reply Like
  • Maddoxx
    , contributor
    Comments (7) | Send Message
     
    If this deal is done it won't just be Vodafone missing out on VZ dividends - but VZ's shareholders. With $100bn plus of debt - paying that down will be the priority.
    8 May 2013, 05:48 AM Reply Like
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