If Verizon (VZ +2.2%) is serious about buying Vodafone's (VOD +2.8%) Verizon Wireless stake,...


If Verizon (VZ +2.2%) is serious about buying Vodafone's (VOD +2.8%) Verizon Wireless stake, $100B isn't going to cut it, thinks Jefferies. The firm values the stake at $121B based on a 7.7x estimated EV/EBITDA multiple for the March 2014 fiscal year, and notes a Sunday Times article discussed a possible valuation of $135B (others have suggested $115B). There's also the question of how keen Vodafone is on selling when its stake has been appreciating considerably, and is now yielding giant cash distributions. On the flip side, a sale could fuel a massive M&A-driven expansion into growth markets. (Reuters report)

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Comments (7)
  • Matt-Man
    , contributor
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    As Vodafone marketcap is 149b$, 135b$ from Verizon sell would make remaining Vodafone marketcap only 14b$...
    25 Apr 2013, 12:43 PM Reply Like
  • Deja Vu
    , contributor
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    Yes, that is Einhorn's investment thesis. But if that is so, and it seems so in black and white, why hasn't VOD shot up??
    25 Apr 2013, 12:50 PM Reply Like
  • Mike Maher
    , contributor
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    Because if they sell the most valuable asset, does anyone really want to own a company that is so massively exposed to the European consumer, as the EU slides back into recession?
    25 Apr 2013, 12:52 PM Reply Like
  • Energysystems
    , contributor
    Comments (2112) | Send Message
     
    I'll sell $VOD if they sell the VZ wireless stake. I'm hoping it's a controlled demolition, with $T going for the rest of the international biz of $VOD. I'll happily take the 39.50$ buyout that's been bandied about, although I do believe it's worth more than that.
    25 Apr 2013, 12:55 PM Reply Like
  • Matt-Man
    , contributor
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    Maybe Vodafone knows that today one gets good return on US market. Couple years from now APU of US gets closer to Europe markets with increased competition and Verizon valuation will not be same any more.
    25 Apr 2013, 01:23 PM Reply Like
  • Eric Jhonsa
    , contributor
    Comments (1276) | Send Message
     
    That's a good point. VZW is sitting pretty in the U.S. right now, but competition could be tougher in a year or two thanks to the M&A/consolidation that's now taking place. There's also the question of how much data revenue growth left now that a solid majority of U.S. postpaid subs are on smartphones.
    25 Apr 2013, 02:51 PM Reply Like
  • Energysystems
    , contributor
    Comments (2112) | Send Message
     
    100B certainly won't get it done.
    25 Apr 2013, 12:44 PM Reply Like
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