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Vodafone to consider Verizon stake offer
London, July 24, 2013
The board of Vodafone would seriously consider any offer for its 45 per cent stake in Verizon Wireless if it offered more value to investors than the current status quo, its chairman said.
Vodafone's partner in the US, Verizon Communications, has made little secret of its desire to buy out Vodafone from its joint venture in a deal that would be one of the largest of all time, with a possible price tag of around $120 billion.
But the U.S. business has become central to the British group in recent years after its fortunes waned in core European markets due to a poor economy, strict regulation and increasing competition.
Gerard Kleisterlee, speaking at Vodafone's annual meeting in London, said his board regularly reviewed the holding in the highly successful U.S. business but added that he did not have anything new to announce about the relationship.
"If we see proposals that generate more value for shareholders we will consider them," he told investors in a meeting that was dominated by questions about the U.S. sale and its European strategy.
"There is ongoing communication (that involves) the full board. Both executives and non-executives are involved in those negotiations with Verizon."
The two owners of Verizon Wireless, the biggest U.S. mobile operator, are in constant contact about day-to-day operations.
Vodafone's finance director Andy Halford said most of the discussions about Verizon in Vodafone's own board meetings were centred on the performance of the business.
"There is absolutely nothing that has changed (regarding a sale)" he told reporters after the meeting.
"The discussions we have are about the business primarily, and the business continues to do very, very well."
Two people close to the situation have told Reuters that Verizon is working on a $100 billion offer, which was seen as an opening gambit by investors. A deal of that size would rank behind only Vodafone's purchase of Mannesmann and Time Warner's AOL buy.
Halford said the company was in a very strong position, and happy with the status quo.
"Over the years both sides have had an interest in buying the other side out, and it ebbs and flows," he said. "The great thing is the business is a good one, most people would love to own that business, so it's just a nice position to be in."
Vodafone chief executive Vittorio Colao said in May he would stake his reputation on selling the group's prized stake at the right time and right price, saying he would not bow to pressure to do any deal. – Reuters