Third-biggest corporate deal nears a conclusion
Sources said senior executives were working late into the night on the terms of the acquisition of the 45 per cent stake by Verizon. If successful, the agreement would be the third-biggest corporate deal so far.
Vodafone board members were said to be deliberating on final details, including the proportion of cash versus shares. Sources expected Verizon to pay half in cash and half in shares, although the situation was fluid.
Both sides were said to be "confident" a deal would be done, despite markets being closed in the US for Labour Day, though the timetable could slip. "It's a good price and it crystallises the value pretty fully of the US asset after many, many years of not really having a satisfactory cash return [from Verizon Wireless]," said James Britton, an analyst at Nomura.
Vodafone shareholders are expecting as much as 70 per cent of the proceeds, a major boost for British fund managers and pension funds.
Frequently Asked Questions about this Article…
London-based Vodafone confirmed it was in advanced talks over the sale of its US wireless venture to partner Verizon. The proposed deal would involve Verizon acquiring Vodafone’s 45% stake in the US business for about US$130 billion.
Sources expect the roughly US$130 billion deal to be split around half in cash and half in Verizon shares, though Vodafone’s board was still deliberating the final cash-versus-shares proportion and the situation remained fluid.
Yes. If completed on the reported terms, the acquisition of Vodafone’s 45% US stake by Verizon would rank as the third-biggest corporate deal so far.
Analysts cited in the article say the proposed price would ‘crystallise the value’ of Vodafone’s US asset, meaning investors would see the business converted into a clear monetary value and likely receive a substantial cash return after years of limited cash returns from the Verizon Wireless investment.
Vodafone shareholders were reported to be expecting as much as 70% of the proceeds from the sale, which would provide a significant capital distribution to investors.
Yes. Although both sides were described as ‘confident’ a deal would be done, markets were closed in the US for Labour Day and the timetable could slip as negotiations and approvals continue.
Senior Vodafone executives were reported to be working late into the night on the acquisition terms, while Vodafone board members were deliberating final details such as the split between cash and shares.
The article notes that large cash proceeds from the sale—if shareholders receive up to around 70%—would be a major boost for British fund managers and pension funds that hold Vodafone shares.
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