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Citi is excited by reports of Verizon (VZ +1.2%) attempting to buy out Vodafone's (VOD +1.4%)...

Citi is excited by reports of Verizon (VZ +1.2%) attempting to buy out Vodafone's (VOD +1.4%) 45% stake in Verizon Wireless: analyst Michael Rollins has upgraded the carriers to Buy, and states a deal would yield "significant EPS and FCF accretion to Verizon in the first year under most of the scenarios we explored." Others on the Street think likewise.
Comments (4)
  • StLoMoDan
    , contributor
    Comments (62) | Send Message
     
    I can understand that VZ would like to buyout VOD, but is there any solid evidence that VOD wants to sell? They are the 2nd largest wireless company in the world, behind China's market leader, and I can't see them walking away from the US market.

     

    I am long VOD and T.
    18 Mar 2013, 11:47 AM Reply Like
  • A Droyd
    , contributor
    Comments (2) | Send Message
     
    VOD would have a large gains tax bill if they were to sell VW to VZ. VOD shareholders would probably find this unattractive. Simpler for VZ to buy VOD and then sell off the bits it doesn't want - many of which are quite attractive.

     

    I am long VOD (UK resident)
    18 Mar 2013, 12:02 PM Reply Like
  • 6312061
    , contributor
    Comments (40) | Send Message
     
    How do you evaluate the impact on share price(s) of VOD selling its 45% share to Verizon without an explicit assumption as to the price...?

     

    Another key question would be what will VOD do with the $$ it receives...?
    18 Mar 2013, 12:10 PM Reply Like
  • A Droyd
    , contributor
    Comments (2) | Send Message
     
    VOD's track record is to pay down debt and buy back shares
    18 Mar 2013, 02:28 PM Reply Like
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